Swing Trading

(redirected from Momentum trading)

Swing Trading

Refers to a type of short term (one day to a couple of weeks) trading, triggered by technical analysis, for example, momentum. Swing trading is distinguished by the notion thatthe trades are executed while the assets is moving in upward or downward momentum. That is, you are riding the >momentum.
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References in periodicals archive ?
Fifteen of these United States time-series momentum trading strategies (that is in 31 percent cases) are sensitive to market movements.
During both periods, the momentum strategy generated positive, abnormal returns but exposed investors to occasional sharp losses or "crashes" The excess return associated with momentum trading averaged roughly 1 percent per month between 1927 and 2012, and 0.5 percent per month between 1867 and 1907.
Momentum trading led to investors chasing small- and mid-cap stocks in the UAE stock exchanges, as investor confidence soared over speculation that the oil price had bottomed out.
While many institutional investors look at long-term fundamentals, which help to stabilize the market, most retail investors tend to focus on short-term gains and momentum trading, which tend to magnify the volatility.
However, they merge into a momentum trading strategy in the long term equilibrium.
In reality, momentum trading, with traders chasing ever-rising prices, was an important contributor to the rise in oil prices between January and May.
Moreover, momentum trading (buying when markets rally and selling when markets are going lower) has probably hurt more than it has profited investors, due to the extent of the moves and the fear to re-initiate a position too early, whil e the long volatility trade is most likely also over.
"We wanted to maintain the purity of momentum trading. We've done something more valuable: It's for when someone is looking for protection during equity corrections.
Momentum trading led to investors chasing small and mid-cap stocks in the UAE stock exchanges, as investor confidence soared over speculation that the oil price had bottomed out.
Once arrival of phutti from Punjab gains momentum trading volume will also expand, sources added.
Stein (1999) A Unified Theory of Underreaction, Momentum Trading and Overreaction in Asset Markets.