Momentum is the rate of an acceleration of a security's volume that is, the speed at which the price is changing. Simply put, it refers to the rate of change on price actions for a particular asset and is usually defined as a rate. In technical analysis , momentum has held an oscillator and is used to help identify trends. The Basics of Momentum Trading Investors can use momentum as a trading technique. Once a momentum trader sees acceleration in a stock's price, earnings or revenues, the trader will often take a long or short position in the stock in the hope that its momentum will continue in either an upward or downward direction. This strategy relies on short-term movements in a stock's price rather than fundamental value. When applied, an investor can buy or sell based on the strength of the trends in an asset's price. If a trader wants to use a momentum-based strategy, he takes a long position in a stock or asset that has been trending up. If the stock is trendi