Momentum Trade- Strong Move Breakout Trading

When analyzing the market, there are times after a strong top or bottom is true, AKA "termination condition," that the market will run quickly.  Momentum trades should only be taken in a very strong market condition. 
One of the most effective momentum trades that we have taught since 2004 incorporates using the yellow one-to-one dots. 
Momentum trading rules require 13-2 and 5-1 strong trigger lines
The entry is during a quick pullback to yellow one-to-one dots + a FIBONACCI area or Mid band. The key is to make sure the small triggers remain very strong, "no pinching or rolling, and the small triggers are located well below or above the 13-2 small triggers, which are very strong. In the following examples, you will see quick pullback entries that provide great opportunities to make additional trades. If the market makes a close above the 13-2 triggers ( super-imposed on this chart), you will exit.  You will also exit momentum trades with any loss of momentum. 
Momentum short trade after termination and the top
5-1 momentum trade at Fibonacci and yellow one to ones
Momentum SHORT at One to Ones and Fibonacci followed by Momentum long
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Example Trading Plan

Edge or Continuation Trade

Last modified 6mo ago

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