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Momentum Investor

Someone who buys stocks or other securities that have had high returns over the past 3 to 12 months, and sells those that have had poor returns over the same period.

Additional Comments:

This strategy looks to capture gains by riding "hot" stocks and selling "cold" ones. To participate in momentum investing, a trader will take a long position in an asset, which has shown an upward trending price, or short sell a security that has been in a downtrend. The basic idea is that once a trend is established, it is more likely to continue in that direction than to move against the trend.

Related Terms:

Momentum Iindicator
Most price-based indicators are also called momentum indicators. In most cases, the momentum indicator represents the ...

Relative Strength
A ranking of near-term directional price movement. A technical indicator comparing a security’s price action as compared ...

Speculative Stocks
Speculative stocks have the potential for above-average returns, but they also carry above-average risk of loss ...

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