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Pick Great Stocks For Momentum Trading
By James Leeds
Momentum trading is solely focused on trading with small swings in growth.
The problem is that if you don't know what stocks to look for and how to approach them while limiting your risk, you won't even get close to making some profits. Remember, you are only looking for minute swings in order to make your profit. The money actually comes from the amount of the stock you buy, which in this trading method, is substantial.
It's not necessary to focus on this method as your only way to make money by trading stocks. But you can learn how to take advantage of quick cash possibilities when the opportunities exist.
It's not hard to make a lot of money with this method, but for a beginner, you stand to lose just as much in a very short amount of time. The key, as with anything else in stock market investing - is research.
What's the best time to momentum trade?
One great example of when to try momentum trading is when you find out that a company is about to release an income report. If the analysts are predicting a positive report, it's generally a good time to jump in and ride the wave for a couple of points after the company announces the results of the quarterly report. Make sure your sources are reputable, and then trade the stock quickly after hitting a couple point gain. The key is to get in while the knowledge is new, and then get out before everyone else does. This takes a lot of work to master, but once you do, it's extremely profitable.
