Define momentum stocks as shares showing strong price trend, volume expansion, and relative strength
Screen for stocks with high relative strength, strong earnings growth, and increasing trading volume
Focus on stocks breaking out of clear chart patterns such as bases, ranges, or consolidation zones
Enter only when price confirms strength above resistance on above-average volume
Use tight stop-loss orders below recent support, breakout levels, or key moving averages
Size positions based on risk per trade, not on conviction or stock price
Avoid chasing extended moves far above moving averages or prior breakout points
Add to winning positions only after the trade proves itself and continues higher
Take partial profits into strength or at predefined targets if the move becomes extended
Watch for signs of exhaustion such as declining volume, failed breakouts, or sharp reversals
Track market trend and trade momentum stocks more aggressively when the broader market is strong
Exit quickly if momentum fades, support breaks, or the trade no longer acts well
Keep a watchlist of strong stocks, catalysts, and sectors leading the market
Review trades regularly to refine entries, exits, and risk management
Use disciplined rules and avoid holding through major uncertainty without a plan