Different strategies offer to receive the best profit for trade with shares. Trade without strategy is not advantageous, because most traders fall under influence too much emotionally. That's why a strategy with which is traded successfully should be considered. Short-term decisions are completely avoided therefore which can lead to big losses. In addition, the too long investments are also no success which are switched on just blind. In this connection the Momentum strategy is to be explained which is used basically for it to find trend shares. Besides, should become after different tips gone forward.
What is the Momentum strategy?
With the Momentum strategy it concerns a beginning to find special trend shares. It could be shown in the past that shares, ind he have performed past a rising value and are further rising, in the future the same trend are maintained. These shares should be analysed for the time being for a longer period in the past to be able to forecast a similar share price development. With the Momentum strategy shares are picked out therefore which are asked very much and are bought at the moment from many other people. The stock market wisdom "The Trend is your Friend" is pursued in this connection. With the help of the trend analysis the moment is looked closer a share. With pleasure the index can be also used to lead the investigation more exactly. Of course there are different calculation kinds, so that an exact value can be fixed. Among the rest, the relative strength analysis which pursues a special approach can be used to the Momentum regulation.
Why does the strategy function?
There are clear clues which can prove that the strategy absolutely hides truth. If shares are looked after a growth of more than 12 months, the best 10 percent of the shares should be taken in the closer visor. These shares have as a rule a profit increase of 20 percent. This increase clearly lies about the norm. Shares with a negative Momentum have no profit trend, but lose topically to value. From it one would result that the markets are very different. The shares which show a higher course and the inquiry rises topically can be valued accordingly higher. The fear that too expensive shares are bought which lose later to value is with this strategy not the case. Enough profit growth exists, so that the traders can earn enough on the shares.
The strategy surely basically not before turning points from. Investment attempts can be recognised with the strategy absolutely clearly which trend changes make quickly clearly. The Value attempts can profit from turning points. With long persistent trends the turning points are not easily used, because these are to be recognised not easily. If the market is analysed, the Momentum strategy can lead in most cases still to profits.
The strategy should be used at best for 12 months to be able to receive good yields. In addition, the payment is to be followed by higher commissions if is searched for rising shares. The costs come with most people, in addition, strongly to the weight and often do not bring the desired yields which were painted to themselves. The strategy of the Momentum must be well pursued without losing the consequence. One must be ready to shop expensive in many cases and to sell again cheap. Beside the strategy experts advise permanently to use a furthermore stable strategy which offers a sure beginning. To invest in a branch and to take the rising shares, has not operated. However, it is not gainful to take crises and to wait for this completely. A quicker legal capacity would be necessary here to be able to receive other positive results.
The indicators
So that the Momentum strategy can be carried out sensibly, different indicators are required which are important to carry out a high-quality regulation. The analysis of a rising share is protected as a rule by the Chartanalyse. This can lead with the regulation of the strength by the whole market comparison to the values which are needed for the Momentum strategy. One can determine basically the strength of a share if the index is looked closer. The index can be analysed, for example, with the values by DAX. Simplisticly this means that if the share price better develops than the index, a share a high relative strength shows. If the share price shows a worse development than the index, the share has to show no particularly big strength.
So that the strength and the growth of a share can be looked in detail, among the rest, should be kept directly to the relative strength. An exact formula which makes an analysis possible could be used by the relative strength after Levy. The topical weekly closing price is divided by the average of the past weekly closing prices for a certain period. The result brings a value which moves around 1. Besides, the rule is valid that the higher the number is, the trend course for our analysis of the shares is the better. If the number more than 1 exists, should be come along to the purchase of the share. If a value exists under 1, it concerns a sales candidate who is not very interesting. In this case the share is compared not to an index, but with own chart development which is to be read from charts. It can be used with the analysis kind for the Momentum strategy different periods which lie in the past. These can bring a differently strong explanatory power with themselves. The shares which have risen during the last 6 months also rise during the next 6 months exceptionally as Levy has stuck.
Data for Momentum are of use
It is often asked where the important data can be received to the call of the shares. The figures which are used for the strategy must not be analysed themselves and be investigated. Basically it is enough some minutes on the Internet to look to receive the suitable data after some clicks. With some finance main entrances the required data can be seen free of charge. A registration is also not necessary in most cases. With a professional comparison on different main entrances it is protected that the technical identification numbers can be seen for the Momentum strategy to be able to apply therefore the Momentum strategy. Beside the technical identification numbers shares with their important indicators can be seen. With it an interesting and besides free service is to be received to receive new figures easily and fast and to analyse the topical share values to be able to invest gainful. In addition, most suppliers offer an appoximate value how the other traders behave. It can be seen share which suppliers buy her shares and who sells his shares. Therefore an appoximate value can be found to orientate itself by the mass.
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