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Momentum Trading


Momentum trading requires that you are able to estimate or monitor the energy behind the movement of a stock, futures or Forex pair. When trading it is not good enough to dimply see that it is going up or down.


Learn the secrets of the rubberband trade setup


The problem with the simple approach is that the stock may be approaching support or resistance, and some other technical indicators such as moving averages, stochastic's or MACD may be telling you that it is going to reverse direction, but in fact it is not because of the huge momentum in the stock.


So what happens is that it blows right past the point where you think it was going to reverse, this sort of situation tends to occur towards the end of a trend. The stock may eventually reverse but you will not have gotten as good a price, and of course if you are trading short term options this can be a disaster!


Of course the opposite can also occur, if you are able to correctly monitor momentum you will see the momentum reversing long before the stock makes it's big move, this allows you to get in very early and make a much better trade.


I've only touched on the basics here, the truth is that if you are not using momentum in your technical analysis you are really trading blind.


If you want to get a 1st class education in trading trading from a real professional trade you must read more using the following link:


Momentum Trading System

Top Dog Trading Momentum Trading System

Momentum Trading System


Warning: This course is for professionals only - amateurs don't even think about it


  See also: Trend Trading and Swing Trading Course


Momentum Trading