Trading on Momentum: Advanced Techniques for High-Percentage Day Trading
Book Details
- Author: Ken Wolff with Chris Schumacher and Jeff Tappan
- Categories: Day Trading, Momentum Trading
Quick Summary
Ken Wolff presents advanced momentum-based day trading techniques, providing high-percentage intraday strategies that exploit short-term price acceleration in stocks, with practical execution guidance for active traders seeking to capitalize on directional velocity.
Detailed Summary
"Trading on Momentum" by Ken Wolff with Chris Schumacher and Jeff Tappan, published by McGraw-Hill, is an advanced day trading manual focused specifically on momentum-driven intraday strategies. The book targets experienced traders who understand basic technical analysis and are seeking to refine their approach to capturing rapid price movements.
Wolff's methodology centers on identifying stocks exhibiting strong directional momentum -- situations where price is moving with velocity and volume that suggests continued movement in the same direction. The approach is predicated on the empirical observation that once a stock begins moving with force, it tends to continue in that direction for a period sufficient to generate profitable trades at the intraday level.
The book covers the identification of momentum candidates through pre-market analysis, real-time scanning for volume and price breakouts, and the use of Level II quotes and time-and-sales data to gauge institutional participation. Entry techniques are designed for high-probability setups where momentum is confirming, including breakouts from consolidation patterns, pullback entries within established intraday trends, and gap-and-go strategies.
Advanced techniques address the specific challenges of momentum day trading, including managing the rapid deterioration of a setup when momentum fades, scaling into and out of positions to maximize capture of the momentum move, and handling the psychological intensity of fast-moving markets. Risk management is adapted for the specific risk profile of momentum trading, where the speed of price movement can work against the trader as quickly as it works in their favor.
The text also covers the infrastructure and tools required for effective momentum day trading, including direct access trading platforms, real-time scanning software, and the data feeds necessary to maintain a competitive edge in a fast-paced trading environment. The strategies are presented with specific rules and examples drawn from real market situations.
