What Are The Best Momentum Trading Strategies?
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Cryptocurrencies notoriously volatile, and to excel in crypto trading would require in-depth strategic planning and technical analysis to secure consistent profits. Among all, momentum trading is used by traders and investors alike to buy an asset with an uptrend price and sell them when the asset’s price starts to lose its momentum.
The strategy reflects the expression as the “trend is your friend” perfectly well. Of course, trading comes with risks but momentum trading gives traders more control and fewer potential failure points.
Today you’ll learn what is momentum trading and the risks it possesses.
What is Momentum Trading?
Momentum trading is a trading style traders use to assess the strength of an asset’s current trend to buy an asset while the price is rising and sell it at an assumed peak price. The rationale behind momentum trading is if there is enough force driving a price move, then it will continue to move in the same direction for a moment.