Accessibility Menu

What Does Momentum Trading Mean?

By Matthew Frankel, CFPUpdated Oct 12, 2025 at 11:06 PM

Key Points

  • Momentum trading profits from stock trends, often spurred by events like earnings reports.
  • Key strategy involves buying stocks at new highs, predicting further rises.
  • High risk involved, as trends can abruptly reverse, leading to potential significant losses.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.