≡ Menu

How To Trade Momentum Stocks

Fill this Form to Get 5 Day Free Course on Options And Immediately Get an email to Download eBook on Option Greeks. You can also get an Equity Intraday Strategy for FREE

=====The Article=====

This article explains how to trade momentum stocks for beginners and experienced traders.

Benefit of Trading Momentum Stocks

If you can find good entries in momentum stocks manage your risk and stick to a good plan you can always trade momentum stocks very well.

However it is very important to first have some idea on how to trade the momentum stocks.

In this article I will tell you a few guides and rules you can follow to trade the momentum stocks.

Breakouts of Daily Charts Are Very Important Signal

If Nifty is rising there is a high chance that 80% of the Nifty 50 stocks will rise.

What You Can Do

Look out for stocks that had seen long period of consolidation. Stocks with good moat and market cap. If they were stagnant for a long time there is almost a certainty that they will move up along with Nifty. You can go long in these shares. It is always better to have some ideas on Candle sticks. For longer term holdings you can go for 50 days moving averages. The longer a stock is trading within a support and resistance, the more powerful the move will be when it breaks major resistance or support.

Breakdowns of Daily Charts Are Also Very Important Signal

Breakdowns is same as Breakouts except its to the downside. A mid-cap stock not doing well still trading range-bound for last 3-4 months will break its support and move down fast if overall the market condition is negative. However you may have to use derivative trading to short a stock. If you use futures or options to short a stock you must learn hedging. 50 days moving averages is also very important here.

Lookout for Pullbacks

Most stocks do not go straight up or down forever. Some stocks make a strong move up or down in matter of days but after certain percentage move a pull-back occurs. Moving averages can come at help here. When new moving average is created look for new support and resistance levels. 20 day moving average a good to know short term trend, 50 day is best for a medium term especially for mid-cap stocks. If you are looking for more profits and can give time then 200 day moving average is a good indicator.

Points to Remember To Trade Momentum Stocks

  • Look out for volatile stocks. Stocks like SBI and HDFC are very lazy in their moves and cannot be considered momentum stocks. Stocks with no range should not be traded.
  • Liquidity is important. Do not trade in non-liquid stocks. You may not be able to get out when required. Ask and bid prices will also be pretty far.
  • Quarterly earnings are important. Momentum stocks will move fast depending on their Quarterly earning report. This is the time when support and resistance levels can be broken easily. This is a great time to trade Momentum Stocks.

    Hope this article helped you to learn how to trade momentum stocks. If you have any questions you can ask in the comments section below. If you are an options trader and losing money you can also learn hedging methods to make monthly income trading options without looking at your computer all day.


    What you should do now

    1. If you have still not subscribed for my free 5 days course you can do by filling the form above. You will learn a lot about option trading.

    2. If you are a new option trader, not much experienced and are making losses you can do my paid course. I recommend Nifty Conservative Option Course for beginners because it is easy to understand and easy to trade. Even a 18 year old young trader or a housewife can learn it and start trading from next day. It will help you to earn consistent monthly income without any software or speculation or stress or big risk. You will learn proper hedging strategies that works in any market condition.

    3. If you are banknifty weekly options trader you can do my Bank Nifty Weekly Options & Futures Strategy Course. You will learn future and option hedging strategies that works in volatile market condition.

    NOTE: Here is one more help. You can open a trading account in UPSTOX and send me a WhatsApp message on 9051143004. I will send you a FREE Equity Intraday Strategy that you can start trading and make approx 200 a day. You need 5000 to start trading this strategy.

    CLICK HERE AND REGISTER IMMEDIATELY TO OPEN AN ACCOUNT IN UPSTOX. If you do not register immediately you will not be mapped under me which is very important to get the free strategy.

    UPSTOX is a low cost broker where buying and selling of stocks is FREE.

    Testimonials

    What Traders Say About My Course

    Course fees: Click here to know the course fees.

    Here is complete process of my course

    1. Once you pay I will send you the course materials for studying to your email.
    2. You read and ask me questions via phone/whatsapp/email to clear doubts.
    3. Then you start paper trading and still can ask me questions.
    4. After about one month you can start trading.
    5. Since doubts can come anytime the support will be there for one year.

    Within one month you can start trading on your own. No need to depend on anyone once you are on your own.

    If you have any question you can contact me.

    You can read about me here and my trading mistakes here.

    TheOptionCourse.com Copyright @ All Rights Reserved
    Dilip Shaw, Founder

    Copyright Infringement: Any act of copying, reproducing or distributing any content in the site or newsletters, whether wholly or in part, for any purpose without my permission is strictly prohibited and shall be deemed to be copyright infringement.

    INCOME DISCLAIMER: Any references in this site of income made by the traders are given to me by them either through Email or WhatsApp as a Thank You message. However every trade depends on the trader and his level of risk taking capability, knowledge and experience. Moreover stock market investments and trading are subject to market risks. Therefore there is no guarantee that everyone will achieve the same or similar results. My aim is to make you a better & disciplined trader with the stock trading and investing education and strategies you get from this website. Please note that I DO NOT give tips or advisory services by SMS, Email, or WhatsApp or any other form of social media. I strictly adhere to laws of my country. I only offer education on finance, investments on stock markets in the best possible way as much as I can through this website. Still, you must consult an authorized advisor or do thorough research before investing in any stock or derivative before trading any strategy given in this website. I am not responsible for any investment decision you take after reading any article given in this website. Knowledge is the only way to get success in stock markets. I try my best to give stock market investing and trading knowledge through the articles posted in this website. Thanks for visiting my website.

    Swing Trading Rules
    How To Trade First Hour Intraday Day Trading
  • About the author: I started trading stock markets since 2007. However my first 3 years were losses. Then I dedicated almost 1 year on studying, researching, paper trading options and learned a lot in that time. Since 2011 I am trading Nifty options profitably. Call me if you need any help trading options on 9051143004.

    { 2 comments… add one }
    • chandrakant

      Nice article
      Ex: Steel exchange India ltd.
      This a momentum stock

    • Ashish

      Good article Dilip

    Leave a Comment

    Menu