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Momentumtrading

Momentum Trading Strategies for Day TradersMomentum Trading Strategies for Day Traders Momentum trading is a highly-regarded trading strategy used to seize opportunities in trending markets. This article explores momentum trading and offers two comprehensive strategies for capitalising on rising and falling markets. What Is a Momentum Trading Strategy? Momentum trading is a technique where traders aim to capitalise on the inertia of existing market trends. The primary objective is to enter into a long position when an asset is showing an upward trend and to take a short position when the asset is trending downward. It's a strategy that thrives on volatility and requires a keen eye for market indicators. Understanding Momentum Indicators Momentum indicators are vital tools that help traders in gauging the strength and sustainability of an ongoing market trend. These indicators are often represented as oscillators on trading charts, fluctuating between designated upper and lower bounds. Among the most commonly used are the Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), Stochastic Oscillator, and moving averages. These mathematical tools analyse price action and generate signals for potential entry or exit points. In momentum strategy trading, these indicators act as the 'eyes' for the trader, providing actionable insights into market dynamics. You’ll find a whole host of momentum indicators, including the ones discussed in this article, on FXOpen’s free TickTrader platform. Head over there to get started in minutes. RSI + MACD Strategy The RSI + MACD Strategy combines two powerful momentum indicators to enhance the precision of trading entries and exits. The Relative Strength Index (RSI) typically oscillates between 0 and 100, providing insights into an asset's overbought or oversold conditions. The Moving Average Convergence Divergence (MACD) comprises two moving averages, generating signals based on their crossover points. In day trading, this momentum strategy can be particularly effective. Entry A common entry point is when the RSI crosses above 30 (indicating potential reversal from an oversold condition) or crosses below 70 (suggesting the asset may be overbought) alongside the MACD signal line crossing the MACD line in the same direction, roughly at the same time. Stop Losses Traders often place their stop-loss orders near a recent swing point. This allows for some volatility while protecting against significant losses should the trade move unfavourably. Take Profits Profit-taking opportunities may arise when the RSI crosses back above 70 or below 30, signalling a potential end to the trend. Alternatively, traders often set their take-profit levels at established support or resistance lines on the chart. While the RSI excels in identifying overbought or oversold conditions, the MACD pinpoints trend reversals through moving average crossovers. By combining these two indicators, traders can filter out noise, reduce the likelihood of false signals, and capitalise on sustained market movements. Stochastic + HMA Crossover Strategy The Stochastic + HMA Crossover Strategy employs the Stochastic Oscillator in tandem with two Hull Moving Averages (HMA) of differing periods—9 and 21—to identify trading opportunities. The Stochastic Oscillator measures an asset's closing price relative to its high-low range, with levels above 80 considered overbought and below 20 as oversold. The HMA aims to capture price trends with reduced lag, making it responsive to market changes. This trading strategy offers frequent entries and exits. As such, it’s also an ideal momentum day trading strategy. Entries Traders often enter a position when the Stochastic Oscillator crosses back below 80 or above 20. They then look for a crossover between the 9-period and 21-period HMA in the same direction within the next two candles, confirming the entry signal. Stop Losses Much like the RSI + MACD strategy, stops are usually placed near a recent swing point to mitigate excessive losses. Take Profits Profit levels can be set when the Stochastic Oscillator moves back into the opposing range (above 80 or below 20). Traders may consider holding the position a bit longer as the Stochastic Oscillator frequently fluctuates in these areas. A significant support/resistance level is suitable. Here, the Stochastic Oscillator offers precise overbought and oversold levels, while the HMA's reduced lag helps traders identify and confirm trends more quickly. Together, these indicators offer a nuanced yet timely picture of market conditions. Benefits and Drawbacks of Momentum Trading Momentum trading is undoubtedly a popular style of trading. However, it comes with some key benefits and drawbacks: Benefits Quick Returns: Momentum trading may yield quick returns due to its focus on short-term trends. Highly Liquid: Traders often deal with high-volume assets, ensuring easy entries and exits. Data-Driven: Utilises well-defined indicators, meaning it's less subjective than some other styles of trading. In algorithmic trading, momentum strategies are popular for this reason. Drawbacks Volatility Risks: The focus on quick returns exposes traders to high volatility and potential losses. False Signals: Indicators can sometimes generate false signals, leading to poor trading decisions. Costs: High frequency of trading means higher transaction fees, which can eat into profits. The Bottom Line In essence, momentum trading strategies offer traders a structured approach to benefit from market trends. The strategies outlined here can serve as a solid foundation, giving traders space to refine them further based on their own experience and market observations. Moreover, they can be used as momentum stock and forex trading strategies. If you're ready to put them to the test, you can open an FXOpen account to start your trading journey across hundreds of markets. Good luck! This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
FXOPEN:XAUUSDEducation
by FXOpen
4
Fundamental & Technical Analysis on NDQ100Fundamental : COT report shows a rise in shorts positions continuing the past 3-4 week while simultaneously showing a decrease in longs positions held the past 4 weeks. Net positions also show a large change from 7.8K down to 535, a -88.71% change. Open interest is split between both longs and shorts with neither showing an advantage, over all OI has decreased a little COT Report : cot-reports.com Technical : From a technical prospective price action is underneath the EMAs, were getting the 3 EMA cross down the 10 EMA while Momentum is negative, and the Stochastic is underneath 50% TP/SL : Target around recent lows with a stop above highs
EIGHTCAP:NDQ100Short
by Iateyourcroissant
Growth, Momentum & Innovation: Updated WatchlistUpdated Watchlist As we dive deeper into our trading strategy inspired by Mark Minervini, I'm excited to share a detailed analysis of our updated watchlist: www.tradingview.com This list is meticulously curated, focusing on stocks poised for potential pullback entries, suitable for short to medium-term trades. Here’s what we’ve analyzed: Selection of Stocks in Strong Uptrends: Our primary filter is selecting stocks exhibiting strong uptrends over the past weeks or months. We use specific criteria like stocks trading above their 50-day and 200-day moving averages, a sign of enduring strength. Additionally, we look for stocks outperforming the market index, indicating relative strength. Volume Analysis During Pullbacks: We observe the trading volume during pullbacks. An ideal scenario is a pullback on lower-than-average volume, suggesting a lack of selling pressure. A sudden increase in volume can sometimes signal capitulation, which might lead to a potential reversal. Key Support Levels and Technical Indicators: Stocks approaching critical support levels, such as major moving averages or historical support zones, are of high interest. We combine this with technical indicators like the RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence) to gauge oversold conditions and potential bullish divergence. Price Action and Chart Patterns: We're scrutinizing price patterns that align with Minervini's SEPA (Specific Entry Point Analysis) criteria. This includes looking for stocks forming bases, tight consolidations, or exhibiting orderly pullbacks without significant volume spikes. Flags, pennants, and narrow range days near support areas are particularly noteworthy. Earnings and Fundamental Check: While our focus is on technical analysis, we don't ignore fundamental aspects. We check upcoming earnings dates and ensure that the stocks have solid fundamentals, aligning with Minervini's preference for quality stocks. Here is a detailed sector analysis of the stock on our watchlist: Technology (27 stocks) The Technology sector is heavily represented in your watchlist, indicating a focus on companies involved in software, hardware, and various technology services. This sector is known for its growth potential, innovation, and significant impact on global trends. Companies like Google, Microsoft, and AMD are included, reflecting an interest in both established giants and emerging players. Healthcare (7 stocks) This sector includes companies involved in pharmaceuticals, biotechnology, and medical devices. With stocks like Amgen and Regeneron, the focus seems to be on companies with strong R&D capabilities and potential breakthrough therapies or technologies. Financials (1 stock) A smaller focus in your watchlist, indicating a selective interest in the financial services industry. StoneCo is included, suggesting an interest in fintech or emerging financial technologies. Materials (1 stock) With Cameco Corp included, there's an interest in the materials sector, potentially focusing on resources critical to the technology and energy sectors, such as uranium for nuclear energy. Internet (6 stocks) A focus on companies that operate primarily on the internet, including e-commerce, social media, and online services, suggests a bullish view on the digital economy's growth prospects. Software (9 stocks) Software companies, including those providing cloud services, enterprise software solutions, and software development tools, indicate a strong belief in the continued expansion of digital transformation across industries. Biotechnology (4 stocks) With a focus on biotech firms like CRISPR and Vertex Pharmaceuticals, there's a clear interest in companies that are on the cutting edge of medical research and development, potentially offering high rewards but also high risk. Information Technology (7 stocks) This includes a broader look at IT companies, focusing on semiconductors, software, and technology services, highlighting the critical role of IT infrastructure in the modern economy. Semiconductors (3 stocks) With companies like TSMC, AMD, and Qualcomm, there's a targeted interest in the semiconductor industry, which is vital for a wide range of technologies from consumer electronics to data centers and AI. This analysis shows a diversified yet focused interest in sectors that are pivotal to technological innovation and digital transformation. The emphasis on Technology, Healthcare, and Internet-related stocks suggests a strategy that leans towards growth investing, particularly in areas that are expected to shape future economic landscapes. ​
NASDAQ:QQQ
by JS_TechTrading
Gold to $2057 overnight by 6:15am in the morning 1.04.24Gold should start its climb up to $2057 tonight . There should be on last push to 2048-49 then it should start its climb to $2057. Nothing really super technical here. It finished accumulation, then re-accumulation, made a control box, broke out. ran up. Dropped back to the zone to find support and resupply. Pushed a little deeper, and now setting up to break that high using the measurements it made doing everything I just said. Which points to the $2057 area and Im throwing in some timing to make it interesting.... I have a natural rhythm to the market and with that it should finish before 6:15am. just a zone break, followed by a pull back to support and then a launch for profits.
COMEX:GC1!Long
by iCantw84it
Dark Pool Buy Zones for Trading Momentum or VelocityDark Pool buy zones, identified with Relational Technical Analysis of the candlestick patterns and where they form in the long-term trend, along with indicators that reveal large-lot activity, are the key to preparing early for momentum to velocity runs for swing trading, position trading and even for planning long-term investments. NYSE:CHWY is working on a bottom, finally basing and now starting to test the bottom completion level. This can be a strong resistance level where Pro Traders who started a swing trade from the lows are likely to take profits. Often we see a sideways action develop at this level, the lows of which are usually confined by the support level built on the way up. This would be the level to watch for the next buy entry signal. If it consolidates narrowly or briefly, then there is potential for a momentum swing trade. If it platforms a little wider but within the last support level, then a position trade entry can develop.
NYSE:CHWYLong
by MarthaStokesCMT-TechniTrader
Analysis of the psychology and Price Action of a momentum moveIn this video I take a look at the psychology of a phase of Price Action that we traded in out Live Trading Room. I review the key price action that I am looking for to get involved in the action for a new momentum push up/down. Our aim in trading is always to enter a trade in the 'unknown' as traders start to realise they are on the wrong side of the action...this gives us the biggest payouts. Intraday Trading is a process of doing the analysis, reviews and having confidence in your read when LIVE trading. ** If you like the content then take a look at the profile to get more daily ideas and learning material ** ** Comments and likes are greatly appreciated **
CBOT_MINI:YM1!Education
by TradeTheStructure
XAGUSD off tonight and tomorrow, up 1500 lets go Trade 4 Lets go New indicator, new trade. Got the next 36 hours off lets trade all of them lol. I think more down side push today i gave back some money even though I knew it was going to consolidate and run up and down across my entry. Mistake to trade at work missed 3 oppurtunities to get out with at least $400. SMH. Anyways, lets see what the market has for us today. Going to work on perfecting my big push no gain entry signal. Might actually make an indicator for that. Its when you have a candle at the top or bottom of the channel and all of the sudden you see all this volume going into the candle but the candle isnt moving. Thats your entry candle..... that's the one. Just go opposite of what that candle is doing. **** as always if you like or enjoy these posts pls like follow and of course boost (because they are free) and it helps me know you want more of these. Thanks again for all of you who boost the one from yesterday. Now , I didn't harass you guys for boost yesterday and only got 5....but It was a $1800 win on 1.5 lots.....come on? Do I need to ask for that? by iCantw84it 10.02.23
PEPPERSTONE:XAGUSDShort
by iCantw84it
Stonks go BrrrrrrrrMichael Burry's given up but that's not why I'm going long here. RSI is above 60 for the first time since February. Contrary to what most people think, RSI is most useful as a momentum indicator and not something to identify trend reversals with. Going into the results season, we're approaching resistances again, but these are the levels I'd consider my targets for now. Of course this is a risky trade, so we'll keep SLs tight at around (or slightly below) ~4000. Target 1 - 4180 Target 2 - 4320 Note: Using SPX just because it's a personal preference. The Dow and Nasdaq looking good too!
SP:SPXLong
by kartk7
❓What's Your Trading Style❓Which of these methods is your favorite trading method? Comment below 👇 🔹 Breakout trading Breakout trading involves identifying key levels of support and resistance and entering a trade when the price breaks through one of these levels. Traders using this strategy look for price patterns that suggest a breakout is likely to occur. For example, a trader might look for a currency pair that has been trading in a narrow range for an extended period and then enter a trade when the price breaks out of that range. Example: A trader might identify a resistance level on the EUR/USD currency pair at 1.2000. If the price breaks through that level, the trader might enter a long position, anticipating that the price will continue to rise. 🔹 Momentum trading Momentum trading involves entering a trade based on the strength of a trend. Traders using this strategy look for currency pairs that are trending strongly in one direction and then enter a trade in the same direction as the trend. This strategy is based on the assumption that the trend will continue. Example: A trader might notice that the USD/JPY currency pair has been trending higher for several weeks. The trader might then enter a long position, anticipating that the trend will continue. 🔹 Reversal trading Reversal trading involves entering a trade when a trend is about to reverse. Traders using this strategy look for signs that a trend is losing momentum or that a reversal is imminent. This strategy is based on the assumption that the trend will change direction. Example: A trader might notice that the GBP/USD currency pair has been trending higher for several weeks but is now showing signs of weakness. The trader might then enter a short position, anticipating that the trend will reverse. In summary, breakout trading involves entering a trade when the price breaks through a key level of support or resistance, momentum trading involves entering a trade based on the strength of a trend, and reversal trading involves entering a trade when a trend is about to reverse. Each strategy has its strengths and weaknesses, and traders should choose the strategy that best suits their trading style and risk tolerance. 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work, please like, comment and follow ❤️
Education
by QuantVue
3
W Bottom to Momentum Run Example: CATWeekly Chart of CAT: this is one of the Dow components that is nearing its previous all-time high resistance levels. It is one of the first few Dow 30 stocks to challenge prior all-time high prices. Caterpillar Inc. has been running with momentum that will now pause or stall at this level. Now, watch to see which support level holds as profit-taking continues. This is NOT a trading range but an intermediate-term correction ending with a W bottom. Important to note the differences. A bottom after a correction tends to set up for momentum runs that can sustain longer than they do within a trading range.
NYSE:CAT
by MarthaStokesCMT-TechniTrader
1
Bitcoin price leveling outUsing Bollinger bands with momentum on the 1 hour and 4 hour time frames for dollar cost averaging, it seems that Bitcoin is beginning to level out and stabilize in price action. This could be the bottom of this downward trend we have seen since the middle of November of 2021, however, I believe caution needs to be used and careful planning. Based upon the market's recent events of unpredictability and unstable volatility, I believe dollar cost averaging is the best approach over the long term in dealing with this unusual market while protecting your investment. Whether or not this trend continues, it really doesn't matter as this is a good middle range point to pick up a few more positions in it for either a nice little profit if the market does rise, or a stable accumulation point for a continued downtrend. The only thing that is really clear at the moment, is that the market is at a pivotal point. Risk mitigation and budget management skills are a requirement as this really could go either way.
by RobertD7723
3
Queen Bee & the Gap. Path to TargetThis has been trading nicely and I wanted to post a most likely path to target from here: ** Initial Target 47 by July 15, 2022 If you're playing the options you might be interested in how it will get to 47. There are a few factors at play here from a technical perspective that make the probability of success here very high. - I don't use bollinger bands often but they have their utility for gauging explosive breakouts from narrow ranges, and for continuation plays (BMBL is the latter) - The purple downtrend lines represent resistance (solid = has yet to be tested/broken, dashed = recently broken) - The black rectangular boxes are price consolidation zones around critical levels, the 9 day sma is used here as a timing mechanism, and the RSI is useful for gauging the strength of the momentum - the horizontal red dashed line is something I call a capitulation zone (defined by a run of consecutive (>=5) red bars, highlighted oval); the orange dotted line is the gap boundaries Back in March there was a failed break of resistance due to momentum not being strong enough - my interpretation is lack of quality of share ownership at the time AKA weak hands. The technical signal that this was going to drop from there was RSI cross bearish and the 9 day ma falling out of the consolidation zone. Following this failure to breakout there was a capitulation period where those weak hands were taken out aggressively. In May the price exited the cap zone under new ownership (strong hands) and the risk of selling pressure on next breakout attempt was reduced significantly. It formed a new consolidation zone right around the downtrend resistance and broke out when the 9 day moving average exited the top of the consolidation zone (RSI was also in good form). Now BMBL can ride support up to test the next downtrend resistance just below the gap. The path I drew in is what I am expecting to see in the price action (i.e. price will be in the next consolidation zone around June 17 and attempt to repeat what happened on the recent breakout). This time it will need to have the volatility going into the consolidation zone to put buying pressure on both the overhead resistance and the gap - otherwise its out of the frying pan and into the fire... BMBL has this based on the bollinger. What I want to see is RSI (purple) and its moving average (yellow) get tangled up above 70 - that is a true sign of strength (don't mistake that for oversold, it actually needs that kind of momentum to truly breakout and fill that gap). Based on time series model that I adjusted for the expected intermittent consolidation period, my time to initial target of 47 is by July 15. I am personally in the July 15 35.00 calls, but this ain't financial advice. Also, I say "initial target" because I will have to re-assess based on how it trades around the gap. Long term I think this goes a lot higher. Best, George Sand
NASDAQ:BMBLLong
by JerryManders
GBP/CHF SHORT MOMENTUM SIGNAL BASED ON EDGER TRADING SYSTEMThis is the position based on Edger trading system on daily time frame, This setup is 1:1 RR, entry has to be done on the candle close, the entry can be refined by your own knowledge. This is only for educational purpose and no financial advice. ENTRY : 1.20222 STOP LOSS : 1.21395 TAKE PROFIT 25% : 1.19929 TAKE PROFIT 50% : 1.19636 TAKE PROFIT 75% : 1.19342 TAKE PROFIT 100% : 1.19049 FOLLOW RULES: 1. IF TAKE PROFIT 25% HITS, THEN MOVE THE STOP LOSS AT BREAK EVEN AND CLOSE 25% OF THE POSITION. 2. IF TAKE PROFIT 50% HITS, THEN MOVE THE STOP LOSS AT 25% TP LEVEL AND CLOSE 50% OF THE POSITION. 3. IF TAKE PROFIT 75% HITS, THEN MOVE THE STOP LOSS AT 50% TP LEVEL AND CLOSE 50% OF THE POSITION. 4. IF FULL TAKE PROFIT HITS, THEN CLOSE THE TRADE AND ENJOY. ALSO, HIT LIKE, SHARE AND FOLLOW FOR MORE IDEAS. YOU CAN ALSO RAISE QUESTIONS ON TRADINGVIEW.
Short
by theEdger
CAD/JPY LONG MOMENTUM POSITION DAILY TIME FRAMEThis is the position based on Edger trading system on daily time frame, This setup is 1:1 RR, entry has to be done on the candle close, the entry can be refined by your own knowledge. This is only for educational purpose and no financial advice. ENTRY : 98.947 STOP LOSS : 97.101 TAKE PROFIT 25% : 99.408 TAKE PROFIT 50% : 99.87 TAKE PROFIT 75% : 100.331 TAKE PROFIT 100% : 100.793 FOLLOW RULES: 1. IF TAKE PROFIT 25% HITS, THEN MOVE THE STOP LOSS AT BREAK EVEN AND CLOSE 25% OF THE POSITION. 2. IF TAKE PROFIT 50% HITS, THEN MOVE THE STOP LOSS AT 25% TP LEVEL AND CLOSE 50% OF THE POSITION. 3. IF TAKE PROFIT 75% HITS, THEN MOVE THE STOP LOSS AT 50% TP LEVEL AND CLOSE 50% OF THE POSITION. 4. IF FULL TAKE PROFIT HITS, THEN CLOSE THE TRADE AND ENJOY. ALSO, HIT LIKE, SHARE AND FOLLOW FOR MORE IDEAS. YOU CAN ALSO RAISE QUESTIONS ON TRADINGVIEW.
Long
by theEdger