momentum

Momentum

The rate of acceleration of a security's price or volume.

Notes:

Once a momentum trader sees an acceleration in a stock's price, earnings, or revenues, the trader will often take a long or short position in the stock with the hope that its momentum will continue in either an upwards or downwards direction. This strategy relies more on short-term movements in price rather then fundamental particulars of companies, and is not recommended for novices.

See also: Contrarian, Countertrend Strategy, Momentum Fund, Style

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Momentum

The amount of acceleration of an economic, price, or volume movement. A trader that follows a movement strategy will purchase stocks that have recently risen in price.

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momentum

The tendency of a security to continue movement in a single direction. Momentum is the underlying factor in trend analysis of stock prices.