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The 7 Deadly Sins of Trading, and How You Can Cure Them
July 13, 2021
7 Ways to Boost Your Win Rate in Trading
September 21, 2021

What is Momentum Trading?

Published by T3 Trading Group on September 14, 2021

Derrick Oldensmith here, Senior trainer at T3 Trading Group with your pro trader tip!

Understanding the concept of Momentum Trading can be very beneficial in your trading.

We have all heard the saying “Buy Low, Sell High.”???? ????

Well, in Momentum Trading you are looking to “Buy High to Sell Higher.” ???? ????

 

 

 

Momentum trading

Momentum trading is basically trading movement. The definition of momentum is the greater the price the greater the demand.

Momentum trading can apply to single stocks and the market as a whole.

 

How it’s created

The more people who buy → the higher the price becomes → the more people want to get involved.

So, buying actually leads to more buying.

 

Buy high to sell higher

Momentum trading is the concept of actually buying high to sell higher.

Everyone usually talks about buying low, selling high.

A momentum trader tries to identify price points where they expect momentum will come into the market.

This could happen because of a short squeeze or new buying interests coming in.

 

Taking advantage of market movements

Momentum traders take advantage by purchasing quickly on the way up as momentum comes in.

Oftentimes, this is coupled with higher levels of volume so the trader can sell the stock at an even higher price.

After all, that is a momentum trader’s goal!

 

Get in touch

Want to trade with T3? Contact us here!

Or contact me directly at info@t3trading.com.

 

– Derrick Oldensmith

Senior Trader and Managing Supervisor

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T3 Trading Group, LLC, strives to be a complete destination for traders looking to maximize their performance in today’s financial markets. Since our inception in 2007, T3 Trading Group has developed and supported thousands of professional licensed traders throughout the United States.

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