Momo Trading, a Unique Term in Forex
Momo trading is a slang word as well as a new term in forex that is used to represent the game of momentum or opportunity. In playing momo, traders are not interested in corporate fundamentals, but rather to short-run stock price movements. Momo plays often used by traders with daily trading, trading swing , trading position rather than buy-and-hold investors.
The momo game was very popular in the 1990s until the early 2000s before the advent of trading with algorithms. Traders will monitor CNBC or Bloomberg News to analyze events that could lead to market volatility. If the market starts to move, they quickly utilize it to take a position based on the momentum that occurs and immediately exit shortly after getting a small profit before. This algorithm trader has made the momo into a game that is more difficult to exploit because the computer is much faster in responding to the news and putting the trade in milliseconds.
There are many strategies that can be used for trading to identify and utilize momo. Today’s traders rely solely on price and volume to measure momentum, while swing traders can use more established momentum indicators. Popular momentum indicators include:
- Relative Strength Index (RSI)
The Relative Strength Index (RSI) indicator compares the current profits with losses over a period of time to measure the rate of change in price movements or in a memontum.
- Rate of Change (ROC)
The Rate of Change (ROC) indicator is the purest momentum indicator because it only measures the percentage change in price between two time periods.
The Stocastics indicator compares closing prices with higher prices and lower prices over a period of time which will give an indication of monetization and volatility.
Trading by taking advantage of momentum is more risky than most other strategies as it seeks to capitalize on market volatility. Traders will try to enter trade in the direction of the prevailing trend when the momentum rises and exits the trade when momentum begins to fall. In addition, traders who are interested in playing with Momo usually use stop-loss orders and other risk management techniques to limit their downside risks.
Example of Momo Play
A trader can identify the momo game by looking at the earnings announcement of the company that will report better results than expected at a soaring price in pre-market trading. The traders will then look for support and resistance areas that have potential to be seen based on price movements that have occurred in the past while setting the take-profit and stop-loss points . This point can be adjusted after opening depending on the momentum of rising stocks.
MOMO Trading Trend System focuses on trading with high probability with trend and momentum. When operated using indicators and strategies that are proven to be sophisticated, the system from Momo Trading becomes the only one that is consistent as a currency trading. Trading with a trend will give you a high probability of trading and have a bigger chance to win and have a great chance to follow up.
Even if you have found success as a trader today, after making use of Momo Trading you will experience a transformed experience to a more professional level. Momo Trading will define rules and find entries with high probability.Traders can also explain the definition of a trading strategy based on discretionary rules that will give a high percentage and win or loss ratio.