172: The Magic of Momentum Trading – Alan Clement
Better System Trader
The Magic of Momentum Trading
We're going to be talking about the magic of momentum. Momentum is just the tendency for trains to develop and persist in the markets. It's basically driven by two big fears that are in the market: Fear of loss on one side and fear of missing out on the other. As price starts to move up, people don't want to miss out on the trend. So they're willing to pay a little bit more than the previous person - so the trend develops and moves up. The stronger these trends are, the longer they've been in place and also the faster moving they are, the more likely they are to persist at least in the short term.
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