How to trade momentum and Find best trade locations

While We prepare ourselves to chose what type of trader we are, We should prepare for Momentum trading Even for scalping or Swing trading. And when We decided We should use some strong points which cover the strong segments of "Momentum Trading".

Even though Imbalance is not present in the market, It still can continue its previous day activity, And we should be in search for this type of trade locations where Price has retraced of the prior move and Look for momentum to come again and continue moving in the prior trend before correction.

Example of Momentum trading

For next few days, As I have always done to cover the points which we need to be aware while we trade Momentum trading and above chart is the first example, But still if you trade Neutral days after breakout. You can still trade Momentum for continuation or reversals.

How to cover or trail the position

It is very important aspect of trading and it is must to use "Trailing stop", specially when price rallied right after you open the position and those who don't check my earlier post then take a look at this chart.

Update of the chart of cad/jpy I posted yesterday

As I mentioned in my previous posts that it is necessary to understand the logic and when you have few points that cover you entry and force you to enter the trade then it becomes important that you ride the most part of the trend, specially when trend is as stronger as I have mentioned yesterday.

I have booked half of my profits in that trade and as price has shifted equilibrium then there is good chance that it carry the momentum through out the day but even I would be stopped out, there would no regret as It is planned well before the event has taken place

How to trade Momentum

Example Of Momentum Trading

Recent activity spotted in Usd/chf

In this post I would cover How professional trade momentum, Basically it is not necessary that If somethings work for others, should work for you and momentum trading is no different, Because when You try to trade momentum you need understand few Important things and needs to build a check list.

A. Breakouts

B. Rejection After Breakout Should not go too far.

C. First attempt to rise after After breakout

D. Seller's behavior after rejection After First Attempt Failed

Following the above mention points, I would concentrate more on charts which clear the idea how professional traders and they don't need to keep sticking to the screen and wait for the opportunities but rather they eye some levels like rotation center, Momentum after breakouts, Levels protected, Reference points.

Although it is not necessary to cover all these points when you decide to change you trading style and opt for momentum (which for me is the best way to trade as It always tells you when to enter quickly and cover quickly before momentum fades out.)

In the above mentioned chart, there are few levels I have mentioned which are primary breakout and rejection levels and If you want to add few more confirmation life if there is neutral day after breakout and If that level is protected in the first attempt and market rotates around that protection area.

Any question asked will be replied with best of my knowledge.