Momentum

Momentum is a tendency due to which a security has a tendency to continue its price movement in the given direction. For example; if a security is in demand, it will stimulate buying and the price of the security begins to increase and is likely to continue to rise. Similarly, when a security is not in demand, selling will push down the price of the security. If momentum is set in a stock’s price in the market, the trader will often take a long or short position in the stock with the hope that it’s momentum will continue in either an upward or a downward direction. This strategy relies on short-term movements in a stock’s price rather than its fundamental value.