The other side of trading momentum is you can have sharp losses if you overstay the momentum party.
This is especially true at turns and at extreme momentum zones. It can result in sharp reversals. In such situation indexes might be down just .5% but your momentum stock might be down 10%.
That is why watch the stocks up 50% plus in a month number. It seldom goes above 20, but when it does, it is telling you that we are entering unsustainable momentum phase. Such phases offer both opportunities and can also lead to sharp losses.
Ability to rapidly move to cash or abandon a stock when such phase turns is key for short term momentum players.
Some people have heroic tendencies. They want to hold stocks during such phases or buy breakouts. It can be deadly game. Buying breakout will lead to 100 failures . As against that if you wait for 300 plus day on positive to show up you improve your odds.
Trading momentum is a fine art and you need to look at all aspects of it besides just buying breakout. Momentum tends to move in bursts and you have to try and catch those bursts.
FCX might be good stock and I might have said it will go to 125 , but if circumstances change there is no point in holding it till it hits the stop. I sold it on gap up for nice profit while some are asking today what to do with it. If you follow my entry you must also pay attention to my exits. Same is true of any other stock I was holding till yesterday. I closed most at profit and sold remaining for small losses. As against that many just sat there doing nothing. When a momentum stock makes 10 or 15% move in few days, many people start dreaming that it will go up more and are unable to sell in to strength.
Momentum tends to operate in bursts and tends to be episodic.