Hey everyone, Ross Cameron here! In today’s blog, we’re diving into the world of momentum chasers. I’ll share techniques I use to figure out what to trade when there’s a lot happening at once. Whether you’re trading forex pairs, cryptocurrency futures, or stocks like me, there are days when market volatility creates tons of opportunities. Here’s how to navigate them!

What is Momentum Chasing?

Momentum chasing is all about jumping on a trend that’s already in motion. The idea of chasing momentum has been around for generations. Think about the Dutch Golden Age and Tulip Mania. Traders made lots of money by riding the wave of rising tulip prices. There are two main types of traders—trend traders and counter-trend traders. Personally, I find it easier to join the trend and trade in the direction where things are already going.

Why Momentum Chasing Works

Volatility often comes from news catalysts that shake up a sector or the entire market. For example, let’s say a company announces a new groundbreaking product. The stock can spike quickly as traders rush in. Market sentiment shifts, and you can see big moves. Even in global markets, a single piece of news can create much volatility, impacting everything from crypto to stocks.

Case Study: My Trading Day

In a single trading session, I made $11,327.39 by trading 14 different stocks, focusing on momentum. (Results not typical). Some stocks made significant moves, like going up 100% or more before pulling back. It was a day packed with opportunities, and I exemplified what it means to be a momentum chaser by jumping from stock to stock and managing my risk.

Setting Up Your Trading Screen

My main trading screen displays my P&L, positions, charts, and scanners for our Warrior Trading members. I also use secondary monitors to keep an eye on order entries and multiple stock charts with different timeframes. This setup allows me to quickly shift my attention as new opportunities arise, making it easier to manage multiple trades in real-time.

Observations and Techniques

Momentum often clusters, meaning you’ll have a series of strong green days, followed by a slow period. For example, February was a hot month. I had only one red day and several days of massive gains (Results not typical). Once you notice momentum picking up, it becomes easier to spot the next big move and capitalize on it.

Trading Techniques

When chasing momentum, you must manage your risk. If a trade isn’t working, I cut my losses and move on. Early in the day, I checked which stocks were moving and focused on trades showing solid momentum and volume. My scanners help me identify these opportunities in real-time, allowing me to make quick decisions.

Utilizing Real-Time Data

Real-time data from trading software is crucial for spotting opportunities. I use Day Trade Dash for this purpose. The software shows me which stocks have the most volume and are making new highs. Once a stock shows potential, I watch for micro pullbacks and use these as opportunities to enter and exit trades quickly.

Managing Risk

Avoid overstaying your welcome in a trade. Once you see a significant pullback, it might be time to exit and look for the next opportunity. Hot markets can make you feel invincible, but cold streaks can follow if you’re not careful. Always manage your risk by setting stop losses and sticking to your trading plan.

Real-Time Monitoring

I provide real-time commentary to our Warrior Trading members, which helps them make educated decisions. You can benefit from someone else’s experience and insights, especially if you’re new to day trading. This real-time feedback can be invaluable when learning to navigate fast-moving markets.

Conclusion

Day trading and momentum chasing can be highly rewarding, but it’s not without risks. Always manage your risk and be prepared for both hot and cold market streaks. Remember, my results aren’t typical, and there’s no guarantee you’ll find success following my strategies. Take it slow, practice in a simulator, and thanks for tuning in!

Stay Connected

Warrior Trading was founded by Ross Cameron in 2012 and is now a thriving community of thousands of traders. You can learn more about joining the Warrior Trading community here

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Disclaimer: The results shared are based on my personal trading experiences and are not typical. Trading involves significant risk, and past performance is not indicative of future results. Always practice in a simulator before trading with real money.