Editing 1course Stock Market (section)

== The Core Principles of Momentum Investing ==

=== 1. Trend Following ===
Momentum investing is based on the principle of trend following. Investors look for stocks that are already moving in a strong direction, either up or down, and ride the trend until there are signs of reversal.

=== Example: If a tech stock has been gaining 10% each month for the past year, a momentum investor might buy in, expecting the trend to continue. ===

=== 2. Relative Strength ===
This strategy often involves comparing the performance of different stocks to identify which ones are showing the most strength relative to others. Stocks that outperform their peers are considered good candidates for momentum investing.

=== Example: If two companies in the same industry are rising, but one is growing at a faster rate, a momentum investor would likely choose the stronger performer. ===

=== 3. Time Frames ===
Momentum investing can be applied over various time frames, from short-term trading to long-term investing. The key is to identify the time frame that aligns with your investment goals and risk tolerance.

=== Example: A short-term momentum investor might focus on stocks with strong performance over the past month, while a long-term investor might look at performance over the past year. ===