Master the "Relative Strength" strategy. Learn how to ride winners and cut losers by betting on current price trends.
Momentum investing is the strategy of buying securities that are currently performing well—meaning they have high positive price movement—and selling those that are performing poorly. The core belief is that price trends tend to persist. It is not about buying "cheap" assets; it is about buying "strong" ones.
Professional momentum traders don't just look at one chart; they look for relative strength. They compare a stock against its peers or the broader index. The goal is to identify the "leader of the pack"—the stock that rallies the most when the market is up and falls the least when the market is down.