Back in the 1990’s, plenty of high volatility in the bull market made this concept called momentum trading something of a free run in those times, and more and more traders seemed to be subscribing to that type of trading. The thing is, the environments and the elements were set up in that financial environment that allowed plenty of bulls in the market to go with the flow of momentum trading. After all, that was where the money was, and now you need to know whether or not you can do this on your trading online career.
The whole concept of this was to ride a stock that was fast moving, and at the very precise and calculated timing, jump off the stock when it was about to slow down or was already slowing down. When you are trading in the concept of momentum, you do not really have to care about the fundamentals of the company, and what you are doing is actually trading on impulse. How to Make Money Online Is this a good or a bad thing. Now in these modern times, it seems that there has been an endemic of sorts when it comes to impulse trading.
Firstly, the one thing to notice is that impulse trading tends to get fast into the arena of impulsive trading, and this is when it begins to go wrong. Impulsive trading is the sort of trading that ignores most of the generated data from the market and what happens is that you get into the situation where you trade based on hunches and just by looking at the market data at face value. You ignore all your analysis and just trade when the tide seems to turn, hoping you can ride out a price change long enough to make money and hop off when it wants to change direction.
Momentum trading or the impulse trading system has one thing that is deadly to most traders, which is the essential element which creates an impulsive and almost non thinking psychology when it comes to trading. If exposed too long or if no restraint it being placed on it, most traders succumb to the gambit of gambling and soon, they make rash trading decision and lose most of their money on the market. So the question begs whether or not high volatility now allows for the same sort of conditions and elements for the impulse system to thrive.
Yes and no. Yes because sometimes, trading ignores the very rules that it places and forces you to trade on feeling. No because placing restraint on this kind of system is something that a lot of people would find really hard to do. Discipline is a feature of impulse trading, and while this is quite hard to believe, it is something that you need to have before doing so. If not, stick to conservative calculations on the market and take things step by step. With this, you will be able to build up a sizable portfolio for yourself.