Momentum Investing
Riding Market Trends
Momentum investors buy stocks that have shown recent price strength, expecting the trend to continue.
Momentum Indicators
Use momentum indicators like the relative strength index (RSI) to identify overbought or oversold conditions.
Risk Management in Momentum Investing
Momentum investing carries risk, as trends can reverse quickly. Implement risk management strategies to protect gains.
Contrarian Investing
Going Against the Crowd
Contrarian investors buy stocks that are out of favor with the broader market sentiment, anticipating a turnaround.
Identifying Contrarian Opportunities
Contrarianism requires diligent research to identify undervalued stocks with catalysts for change.
Risks and Rewards of Contrarianism
Contrarian investing can lead to significant gains if timed correctly, but it involves risk, as out-of-favor stocks may continue to struggle.
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