Disadvantages Of Momentum Trading ━━━━━━━━━━━━━ High Turn | Stock Market News
Disadvantages Of Momentum Trading ━━━━━━━━━━━━━ High Turnover: Fees associated with higher stock turnover can be expensive. While low-cost brokers are starting to put an end to the high fees problem, it continues to be a significant concern for momentum traders just starting.
Time-Intensive: Momentum trading requires traders to monitor the details of the market daily, sometimes even hourly. Since the stocks they are dealing with will crest and decrease momentum again, investors need to be able to get in and out early. This requires them to watch all updates, seeing if any negative news updates may spook other investors.
Market Sensitivity: Momentum trading is best in a bull market as traders are likely to herd more than in a bear market where the profit margin on momentum trading decreases along with increased caution among investors. ━━━━━━━━━━━━━ @Market_Share
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