Momentum strategy

Momentum strategy is an investment approach that involves buying assets that have recently performed well and selling those that have performed poorly. The idea is that assets showing strong upward trends are likely to continue rising in the short term, while those declining may keep falling. Investors using this strategy aim to capitalize on these trends, expecting the momentum to persist due to factors like investor behavior and market psychology. It relies on the belief that, in the near term, winners tend to keep winning and losers tend to keep losing.