InvestorQ : Is trading in the market all about momentum and nothing else?
Anisha Awate made post

Is trading in the market all about momentum and nothing else?

Rashi Mehra answered.
3 years ago

Momentum may not be everything, but it is a lot. It is your job as a trader to try and be on the right side of momentum always. What do we understand by the term market momentum? Of course there are technical definitions of momentum and there are methods by which charts define momentum in technical analysis. Here momentum is a lot more intuitive.

Market momentum is nothing but a message from the market about the underlying trend. When we talk of momentum we talk of the bias of the market. What does the market hint at? Does it refer to a market that should be bought on every dip? Does it hint at a market that should be sold on every bounce? Momentum refers to the underlying strength or weakness of the index as a whole or a stock in particular. The reason momentum is important for a trader is that you must always stay on the side of momentum. Don’t try to buy in a weak market; that is like catching a falling knife. Don’t try to short a booming market; you are almost trying to stop a high powered Ferrari with your bare hands. When you have momentum in your favour, the biggest risk of trading is automatically eliminated. When you are against momentum, you are either run the risk of your stop losses getting triggered or you run the risk of overnight losses on your positions.


Vikas Singh answered.
3 years ago

No it's all about fundamental
And present situation of the stock i.e the news and orders bagged by the stock or the percentage of sale or production

In momentum a weak stock might also go up and when we enter intoarlet we see it as going up
And buy it in bulk
Then we land up in loss

It's about having or finding some info about the stock rather than following the momentum


K V RAO answered.
2 years ago

Momentum is one important aspect of the market. Investors (long term players) and traders follow three aspects:
(1) Fundamentals
(3) Market analysis.
Each of the above deserves lots of explanations. In a short answer, it is difficult to narrate.


Shahrukh Ahmad answered.
2 years ago

Absolutely not,

Trading is not just momentum.

It's only 5 % momentum. 5 % hard work. 10 % patience. And rest 80 % luck.