Chapter 12: Momentum Trading
by PRASHANT SHAH -
“Success is where preparation and opportunity meet.” – Bobby Unser We have had an extensive discussion on momentum investing in detail, and it is important to understand how it differs from momentum trading. While both approaches are based on the principle of riding momentum, the expectations, processes, and activity levels in these two approaches are ... Read more
Chapter 13: Trading Strategy Engine
by PRASHANT SHAH -
“What makes a decision great is not that it has a great outcome. A great decision is the result of a good process.” — Annie Duke The momentum investing strategy engine that we discussed in the previous section can also be effective for developing a momentum trading plan. Stocks that meet momentum investing criteria often ... Read more
Chapter 14: Effective Setups
by PRASHANT SHAH -
“I believe in analysis and not forecasting. The key to success in investing is not in predicting the future, but in systematically following the present.” – Nicolas Darvas A technical trading strategy typically forms the foundation of any momentum trading plan. These strategies establish the rules for entry and exit, providing a structured approach to ... Read more
Chapter 21: Position Sizing and Risk Management
by PRASHANT SHAH -
“The men on the trading floor may not have been to school, but they have Ph.D.’s in man’s ignorance.”― Michael M. Lewis Position sizing Position sizing is a critical aspect of trading and many traders struggle at it. They often make decisions based on judgment or the prevailing mood, leading to inconsistent results: In many ... Read more
Chapter 22: DeMAP
by PRASHANT SHAH -
“You can’t use up creativity. The more you use, the more you have.” – Maya Angelou There are numerous indicators, patterns, and studies available for analysing stock momentum. Often, these different approaches will shortlist the same set of instruments. However, some studies complement each other by considering distinct aspects of the trend, pattern, and volatility. ... Read more
Chapter 23: Mind over Momentum
by PRASHANT SHAH -
For him, who has conquered the mind, the mind is the best of friends, but for one who has failed to do so, his mind will remain the greatest enemy. (Bhagavad Gita. Chapter VI, Verse VI) We have explored momentum trading plans for various instruments and trading styles. The momentum trading engine is a flexible ... Read more
