stockmarket

Momentum strategy is a stock trading technique that incorporates some elements of IMT into its structure. Momentum traders look for signals to alert them to past trends that will likely occur in the future. The more information you have, the surer you are about how the market will react to stocks declaration of dividends. Portfolios can be built around the simple strategy. With regards to dividend declaration, you analyze past data and narrow down the future days the stock will likely either go up or down depending on the type news they have to deliver.

Like all things, the stock market is predictable, the only challenge is that it’s exceedingly complex. When we have more information about the stocks and the companies, it’s easier to turn a profit. The most obvious example of this is insider trading. Although illegal, insider trades occur when someone has a hold of private information on a company and uses it to their advantage.

With methods like momentum strategy, traders are developing more legal ways to predict the movement of the market.

Source:
http://www.investopedia.com/university/introduction-stock-trader-types/momentum-traders.asp#ixzz3mQHDHi5L

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