Knowledge about stock momentum will help you make millions | stockbee

7/08/2016

Knowledge about stock momentum will help you make millions


Many readers of this blog and beginner traders email me asking where should they start. I always tell them to try and develop understanding of what is momentum , how it works and how to use it.


For swing trading using momentum can help you find many profitable opportunities. The best use of momentum is to reduce your tradable universe to only stocks with confirmed and established momentum.

Currently there are over 5000 stocks actively traded in the market. Momentum allows you to narrow that list to few hundred stocks with best potential for profit. 




Momentum based stocks are the low hanging fruit. You know a stock is going up or down and then you can target part of that move. You can find entry points in direction of momentum along the way.

Momentum is a very powerful friend of short term as well as long term traders.  If you are looking for long term trades, momentum is still your best bet. 

If you understand momentum you will be trading fast moves in the market. For investors also stocks with momentum offer various position trading opportunities


If you are serious about your trading develop basic idea about:

What is momentum.

Why momentum works

What is momentum anomaly

Why momentum anomaly has been shown to be number one anomaly by profit potential

How can you scan for momentum

What is relative momentum in stocks

How can you scan for relative momentum

What is absolute momentum and how to scan for it.

How can you use momentum in swing trading

How can you use momentum in position trading

How can you use momentum as a growth investor.

How can you use momentum as a value investor.

How can you use momentum as a ETF investor.

There are many ways to slice and dice momentum. Having working knowledge about momentum will help you make millions over the years. 

2 comments:

Shilen said...

Hi Pradeep, Great advice. Which 1 or 2 books or white papers have really helped you develop your ideas and answers to these questions on momentum. I would like to increase my knowledge and then practice applying it to develop skill in momentum trading. Thanks in advance.

Pradeep Bonde said...

Hedge Fund Edge by Boucher