Does momentum trading make sense in a peak bull market. Is it right way to manage entry and exit points by monitoring key indicators such as volume, price action, and relative strength
Whatever strategy you’re using make sure to backtest it for at least a few years. Include 2020/21 for its high volatility and 2011/15 since those were bear markets.
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momentum works in any market. i mean thats the point - momentum is to cherry pick instruments or even assets which are in an uptrend for positional trading. i think our algo or strategy needs to be refined over multiple layers. even basic stuff like 21-50-100-200 emas, monthy candles, or such analysis over a larger time frame would work nice.
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Momentum trading can be effective in a peak bull market, as strong upward momentum often indicates continuation. Monitoring indicators like volume, price action, and relative strength can help refine entries and exits, ensuring alignment with the trend’s strength. Volume spikes confirm momentum, price action reveals trend shifts, and relative strength shows overbought or oversold conditions, which can signal when to take profits or adjust positions
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