Chabba Strategy para Futuros YM: Aplicar
Momentum trading is the practice of capitalizing on the continuation of existing price trends in financial markets. It involves buying assets that are t...
Momentum trading is the practice of capitalizing on the continuation of existing price trends in financial markets. It involves buying assets that are trending upward and selling those trending downward, based on the principle that strong trends tend to continue. This approach leverages market psychology and investor herding behavior, where rising prices attract more buyers, creating a self-reinforcing cycle. Key fact: According to academic research by Jegadeesh and Titman (1993), momentum strategies earned approximately 1% average excess return per month in equity markets, validating the behavioral basis of this approach. Momentum trading is a technical analysis-based strategy that focuses on price trends rather than fundamental valuation. Traders employing this approach seek to buy assets already moving in a favorable direction and sell when momentum begins to weaken. This strategy capitalizes on the market's tendency for price trends to persist due to investor herding behavior.