≡ Menu

How To Trade Momentum Stocks

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.

    Please like & share my blog with your friends:

    Hi, I am Dilip Shaw, owner of this website. I am a trader like you. I have been trading since 2007, but lost a lot of money till 2010. I then stopped trading and studied options like college exams. Started trading again from 2011 and never looked back since. I did a lot of research, read books and did countless paper-trading before being profitable. You can read about me here.

    My conservative trading course since 2014 is helping many retail traders just like you who have a job or business make consistent profits like this:

    What Traders Say About This Course
    Testimonials Year 2015
    Testimonials Year 2015 Page 2
    Testimonials Year 2015 & 2016
    Testimonials Year 2016
    Testimonials Year 2017
    Testimonials Year 2018
    Testimonials Year 2019
    Testimonials Year 2020 to 2023
    What People Say Just After Reading My Course
    Emotional Testimonial by a Young Woman Trader and Her Mother
    One Of My Client Is Making Rs.25k Per Week
    Difference Between Other Courses And Mine
    What Others Charge for Courses

    You can do this course from your home. Some traders make amazing profits like Rs. 16.26 lakhs profit in 5 days though results may differ for all.

    This course helps you learn to trade conservative option strategies for monthly income. Once you finish the course you can start trading immediately. You can start trading from any day. No need to wait for expiry. You will make profits consistently.

    This course is good if you have a regular job or business. You DO NOT NEED to monitor your trades every second.

    What You Get?

    Before reading please understand that for all 5 strategies, strike selection will be taught. Strike selection while trading Options is the most essential part to succeed.

    You get two conservative non-directional strategies on options, one conservative stock option strategy and two conservative directional strategies on Future & Option combination.

    Non directional trades are profitable 80% of the times and make 3-5% per trade (Results may vary).

    Directional strategy makes money fast. It does not matter which side the stock moves. In fact you make more when you are wrong in the Future trade. 🙂 Some amazing profits possible here.

    The stock option trade makes 30,000 in one trade and if SL is hit there is a way to recover losses plus make 30k in that trade.

    Technical knowledge is NOT required. No need to monitor trades every second.

    In the course you will learn how to select the strike prices. You learn when to trade, which strikes to sell which to buy, how much profit target you should be looking for, the best place to take stop loss and what to do after taking stop loss – means how to get that money back. The success rate is more than 80%.

    Since trades are properly hedged there is no stress in trading my strategies.

    I am very confident that you will make money trading my strategies. To help you succeed I offer few months support for FREE.

    11 Reasons Why You Should Do The Course:
    1. TA Knowledge NOT required
    2. NO Software Required
    3. Regular Monitoring NOT Required
    4. Continue with Your Job
    5. Do Course From Your Home
    6. 100% Hedged
    7. Stress-Free Trading
    8. Not too much money needed to trade
    9. Scaling Possible
    10. One Time Fee
    11. FREE Support For Months
    To know more Call/SMS/WhatsApp me on 9051143004 or email me now. I know English and Hindi.

    Read the details of the course here.

    If you want to enroll for the course you can do so here.

    P.S: So many years of trading has thought me one thing - it is always better to make small profits month after month, rather than lose money month after month trying to make too much money. It never happens. But small money accumulated month after month can become very big in only a few years.

    Privacy Policy | Disclaimer

    WhatsApp or Call me: 9051143004

    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.

    DISCLAIMER: I am NOT an Investment Adviser (IA). I am an Authorized Person (AP) of a Stock Broker. In other words I am a sub-broker. I DO NOT give tips or advisory services by SMS, Email, or WhatsApp or any other forms of social media. I strictly adhere to laws of my country. I only offer education for free on finance, risk management & investments in stock markets through the articles in this website. You must consult an authorized Investment Adviser (IA) or do thorough research before investing in any stock or derivative using any strategy given in this website. I am not responsible for any investment decision you take after reading any article in this website. Click here to read the disclaimer in full.

    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 November 28, 2017, 1:53 pm

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

    • Ashish November 30, 2017, 6:16 am

      Good article Dilip

    Leave a Comment

    Social Share Buttons and Icons powered by Ultimatelysocial