Momentum Trading and Trend Following with Jerry Parker – The Trend Follower Series Episode #2

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The Trend Follower Series

This is a collection of the All Star trend traders. These are all legends as far as I’m concerned. If you truly want to know trend following, then these are the people you need to get acquainted with. A new episode every week – so SUBSCRIBE to stay updated.

Episode #3 – Momentum Trading and Trend Following

Guest – Jerry Parker

Mr. Parker is the Chairman and Chief Executive Officer of Chesapeake and Chesapeake Holding Company. Mr. Parker received a Bachelor of Science degree in Commerce, with an emphasis in Accounting from the University of Virginia in January 1980. Mr. Parker started his trading career in 1983 as an exempt commodity trading advisor for Mr. Richard J. Dennis, in his “Turtle” training program. Mr. Parker has overseen Chesapeake’s operations and its trading since its inception in February 1988.

Momentum Trading Rules, Momentum Trading and Trend Following with Jerry Parker – The Trend Follower Series Episode #2.

What Is Momentum Trading?

Momentum trading is a method in which traders buy and sell according to the strength of recent rate fads. Price Momentum is similar to Momentum in physics, where mass increased by velocity establishes the possibility that an object will advance its path. In monetary markets, nonetheless, Momentum is figured out by various other elements like trading Volume and price of rate modifications. Momentum traders bet that an asset rate that is relocating highly in a given direction will remain to move in that direction till the fad loses strength.

Where Did Momentum Trading Beginning?

The method of Momentum trading has actually been around for centuries. As early as the late 1700s, renowned British economic expert and capitalist David Ricardo was known to have actually used momentum-based techniques efficiently in trading. He bought stocks with strong executing rate fads, and then sold stocks whose prices were performing poorly. He characterised the approach with the phrase: “Interrupt your losses; let your revenues run on.”.

Just how do you select stock Momentum Trader?

When picking Momentum Trader stocks, you require to check out stocks that are trading over the typical number of shares. Supplies that have greater than typical quantities are those that have a tendency to void higher or lower on the open.

Following the advancement of technological evaluation in the late 19th century, concepts of Momentum acquired usage in the 1920s and ’30s by well-known traders and analysts such as Jesse Livermore, HM Gartley, Robert Rhea, George Seafarer and Richard Wycoff.

The concept was first formalised in academic researches in 1937 by economists Alfred Cowles and Herbert Jones. They discovered that properties that did well in one year had a tendency to remain to carry out well in the list below year.

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