Momentum
Definition · Level 0 · Market basics
Keep reading with Tradecraft
Without an account, you can read three definitions every 30 days. Tradecraft explains all 738 terms and strategies, with the lessons that teach them, flashcards that come back before you forget, quizzes and a payoff lab.
The tendency of assets that have risen (or fallen) strongly in recent months to keep going the same way for a while; also a strategy that buys recent winners and sells recent losers.
Example
Buy the past year’s top performers, short the worst: a classic factor strategy.
Where Tradecraft teaches it
Level 0 · Market basics, in the lesson “Indices, funds & market regimes”: The benchmarks everyone quotes, how ETFs track them, and the vocabulary for market moves.
Related terms
- 52-week high / all-time highThe highest price over the past year of trading / the highest price ever recorded (split-adjusted).
- BetaA stock’s or portfolio’s average sensitivity to the market: the % move expected for a 1% benchmark move.
- Bull / bear marketA rise of 20% or more from a recent low / a fall of 20% or more from a recent peak; a convention usually applied to the S&P 500.
- Candlestick (OHLC)Chart bar showing a period’s open, high, low and close: the body spans open to close, colored green (up) or red (down) by convention, and thin wicks…
- Cap-weighted indexA benchmark where each company counts in proportion to its market value, often float-adjusted, so the biggest names dominate the moves: S&P 500…
- CorrectionA decline of at least 10%, but less than 20%, from a recent peak.