Trading Strategies
Momentum Trading
Buying strength and selling weakness while a burst of directional energy lasts, exiting when velocity fades rather than at fixed targets.
In plain English
Momentum traders enter when price and volume accelerate together and step off when the tape slows. Holding periods run minutes, not seconds, distinguishing it from scalping; the focus on velocity distinguishes it from trend following's patience.
It suits index futures on data days and the open, when energy is highest. On prop accounts the style's bursts pair naturally with one-day-pass evaluations, while its whipsaw risk demands respect for the daily loss limit.
- On a hot CPI print, a trader rides the first NQ thrust for 45 points, exits into the stall, and does not trade the chop that follows.