InvestorQ : As a trader how important is market momentum for me?
Arya Nanda made post

As a trader how important is market momentum for me?

Answer
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Anu Biswas answered.
2 years ago


Momentum is often the most used word but the word that is also the most misunderstood. What do we understand by momentum? It is hard to describe in words but if you are in the market you understand what momentum is all about. It is the underlying trend in the market which can either be an uptrend or a downtrend. It can be a sell-on-rises market or it can be a buy-on-dips market. This rule is critical because it guides you on how you must treat your positions and how you must keep stop losses for different types of positions. The moral of the story is to always be on the right side of momentum. It means that don’t try and outsmart the market. Identify the momentum and stay on the best side of momentum only.