What is Momentum Trading?

Investors who partake in momentum trading are looking for stocks that are moving rapidly, and on high volumes either up or down. Penny stocks or OTC stocks are not normally available for short selling, so these will be on an upward movement. This is short term trading, less than the trading day normally, hours and sometimes even minutes. It is a favorite of day traders.

The goal of the momentum trader is to buy just before the stock is going to make its move and then close the position before the movement ends or when they have hit their desired price point.

This form of trading is not for the weak of heart, study up, learn all you can, and try some practice trading before you jump in.

Happy investing.

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