That is to say, buy high and sell higher vs. buy low and sell high.
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2 Responses to “Momentum trading vs.contrarian trading. Which do you think is a better stock trading approach?”
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That is to say, buy high and sell higher vs. buy low and sell high.
Related posts:
It depends on your time frame.
If you are a short term trader or day trader momentum trading makes more sense. You want to ride the stocks trend. Get in, make some money, and get out. Going against the trend makes no sense, because you don’t know when it will turn.
A long term, or buy and hold, investor can do well with the contrarian approach. Pick a fundamentally sound stock that is trading at a low price, then buy and wait for it to come back. If it takes a month, or several months to turn, that doesn’t matter. Because you are in for the long haul and are confident that in 2 to 5 years you will have made money.
buy low sell high is how warren buffett made his billions. what he does is something called value investing. if you are serious about this stuff you should read every book ever written about warren buffett, all his shareholder letters, & his annual reports. also read peter lynch, benjamin graham, phil fisher, & stay the h ell away from jim cramer. momentum trading is garbage.