A Momentum trading strategy is a style of investing that involves taking advantage of an asset’s price movements over a short period of time.
Momentum traders might use technical analysis tools such as moving averages, relative strength index (RSI), and Bollinger bands to identify which assets have strong momentum and should be bought or sold.
In this Trading Talk Senior Trader Matt will show an Automated Momentum Strategy that he has been testing.
- Does momentum trading work?
- Momentum trading in the Forex market
- Algorithmic momentum trading strategy
- Momentum Indicator
Does momentum trading work?
An example of Momentum Trading is 4 large bullish candles followed through with momentum to the upside.
Algorithmic momentum trading strategy:
Algorithmic momentum trading strategies use computer algorithms to detect and analyze short-term price patterns in order to make profitable trading decisions.
These algorithms are designed to identify trends early on, before they become widely known, and take advantage of them before the market corrects itself.
With careful research, practice, and a sound risk management plan, algorithmic momentum trading can be an effective way to capitalize on short-term price movements
Momentum Indicator
Using the momentum indicator, this can help you follow the trends and follow the momentum.
Using X-Builder you can automate the Momentum Indicator within a few clicks like below.
If you would like to learn more about creating automated trading strategies check out the Trading Talk series which has a new episode each week with different topics and concepts on popular automated trading strategies.
Why wait? Get started today. Sign up for an account today with our partner broker and start creating your own automation.
