If I can recognize better when there’s momentum in the market and when there’s not, my trading will benefit exponentially.

Momentum would seem to come from more people participating in the market. But how would you know that? Well some indicators would be hype around a certain sector or stock. Examples would be of covid/lockdowns/stimmy checks, which boosted market participation exponentially and created a Covid stock sector. This must have carried over afterwords into other sectors such as gaming and “stay at home” plays. Other signs of strength are scanners that are filled up with many stocks that have gapped up; very high abnormal amounts of volume; many stocks making new highs. During these times of strength and momentum you would want to size up and hold for longer periods.

Another example would be Shiba Inu crypto. The realization came to me when my parents mentioned it. Having been checking on it for a couple of weeks prior to that, from social media chatter, I ended up buying Shiba that night on the breakout at .0000011. But I was keen on that from previous similar situations like Doge. There were a few friends who aren’t necessarily traders talking about it early on. Same with meme stonks. It’s like when the “average” person starts talking about a certain stock, it might be tradable very soon. So keep the eyes and ears open to what the normies are talking about.

 Depending on how much hype there is going on, seems relative to how long momentum will last.

Since the hotter market conditions from covid and meme stonks have cooled down, we’ve seen momentum come for brief periods lasting only a week or two until finally falling back into slow periods that last for seemingly much longer. It’s during these slow periods when you must be picker and sell into strength and “transition zones” as I call them which are really just levels of resistance. But recognizing all of this in a timely manner in order to reap the rewards is the ultimate challenge.