Momentum stock screener to scan for high momentum stocks today. These top momentum stocks 2023 are trading on NASDAQ, NYSE and AMEX.
The stocks have been going up steadily in the recent weeks or months and making new highs. Short term swing traders may find new stocks for momentum
trading and long term investors may find stocks for momentum investing with this momentum stocks screener.
Momentum Stock Screener
Momentum Stocks Screener search for the latest stocks with momentum and are in an uptrend. These stocks range from small cap stocks to mid cap stocks,
large cap stocks and blue chip stocks. The list of best momentum stocks is updated after market close each day.
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How To Trade Momentum Stocks
Momentum stocks are the stocks that are making new highs, or gaining momentum with higher volatility than usual. The goal of trading momentum stocks is to buy high and sell higher in a short period of time, anywhere from a few minutes to a few weeks depending on which style you use.
Trading momentum stocks uses a completely different strategy than value investing where an investor tries to buy low and sell high, and tends to hold their stocks for much longer.
There are both pros and cons for trading in momentum stocks trading.
Pros of Momentum Trading
- Traders get higher return in shorter time when they find a winner.
- When there is a recession or the general market crashes, disciplined momentum traders are among the first ones to get out.
Cons of Momentum Trading
- Stocks are more volatile which translates into more risks. To trade these type of stocks, a trader needs to have a higher tolerance for risks.
- It requires mental discipline and skills to trade success on a consistent basis.
Try Smart Scan for profitable trade setups
To trade momentum stocks successfully, here are a few rules that every momentum trader should follow.
- Stop Loss - Stop loss is critical in momentum trading or any type of trading. A trader who does not use stop loss is looking for trouble, and these traders won't last long in the market.
- Never Double Down - Double down is a strategy that many traders use to cut their losses in terms of percentage. Traders often use this strategy hoping to get out even from a losing trade. This is a dangerous strategy as a stock can keep declining until it reaches $0, doubling down could compound the losses and crush a trader's portfolio on a single stock. Instead of doubling down, a momentum trader may consider doubling up on a position that's already working on their favor.
- Trade only liquid stocks - A trader should only buy stocks with liquidity. Momentum stocks should have high volume to back it up. In order for a momentum stock to make any meaningful move, there must be huge trading volume.
- Have a Plan - A trader should always have a plan before he puts on any trade. The market is unpredictable and anything can happen at any time. A trader must be prepared for the worst and know exactly what to do at any situation.
- Trade with the money that you can afford to lose - Since anything can happen in the stock market, you don't want to trade with the money that you can't afford to lose. Many traders use margin accounts which can add to their winnings or making their losses even bigger. Beginners should avoid using margin accounts, experienced traders should be cautious trading with the money they don't own.
The above are the basic rules of momentum trading, let's go over some specific strategies on trading momentum stocks. First of all, there must be volatility in the stocks we are trading with in order for us to make any meaningful returns. Second, the stock must be going up with increase volume so that we know there are interest in the stock.
TSLA was one of the monster stocks that showed up our momentum stock screener constantly since last year. The stock kept making new highs in the 4 month run from late October last year to February this year. Each time the stock rallies to a new high, it was accompanied with higher volume which is the best indicator of a momentum stock.
Nothing fundamental has changed for TSLA in the four month period where it's stock price went from $280 to $900. The only thing that changed was the market sentiment and trader's perception of the stock. Another thing is the short sellers that were forced to cover on their positions which ultimately drove the stock even higher.
In a nutshell, here is a strategy that we can use to trade momentum stocks.
- Buy when a stock breaks out of a consolidation area with usual high volume. You should use other technical indicators or chart patterns to go with the volume indicator for better result.
- Set stop loss for the your trade.
- When the stock moves higher, adjust your stop loss to move along with the higher price. This way you lock in the profit in case the stock stops moving up. For example, if a stock is initially trading at $10 per share, you can set a 5% stop loss which is to sell it at $9.5. When the stock moves higher to $12 a share, you may want to raise your stop loss to sell some of your shares at $11.14 which is 5% from the new price instead of the original price.
- You can have a price target to sell your shares or ride with the trend until your technical indicators give you the signals to sell.
How to Find Momentum Stocks
Momentum stocks usually have some sort of positive news in the recent past that drive the companies' stock prices higher. A stock could be higher because of the company releases a new product, reports earnings beat, hires a new CEO, or raises guidance.
These fundamental changes will be reflected on a company's stock price and technical traders will be able to find these type of stocks through our free stock screener.
In addition to the momentum stock screener, you can also find momentum stocks through the following
How to find Momentum Stocks
top trending stocks
stocks with 52 week high
stocks that gapped up today
breakout stocks today
Momentum Penny Stocks
This list does not include low price penny stocks, you can use the momentum penny stocks if you are interested in trading penny stocks.