Momentum Investing

Momentum investing is the strategy of buying what's strong and avoiding (or shorting) what's weak, based on one of the most robust findings in finance: over intermediate horizons (roughly 3–12 months), winners have historically tended to keep winning and losers to keep losing. It is the disciplined cousin of 'the trend is your friend.'

A systematic momentum approach ranks a universe by trailing return or relative strength, buys the top performers, and periodically rebalances — rotating out of names that lose their leadership. It's the opposite instinct of value investing, which buys what's cheap and out-of-favor.

Momentum is closely tied to trend and breakout techniques on shorter timeframes, and to breadth for gauging whether momentum is broad or narrow.

Momentum has been documented across decades, countries, and asset classes — it's one of the few effects with strong academic support. But it carries a specific danger: momentum crashes. When leadership violently reverses (often at market turning points), momentum strategies can suffer sharp, fast losses. That's why exit discipline and sizing matter as much as the entry.

Entry Point Trading incorporates relative-strength and momentum ranking into its daily signal, with the context and risk framing shown — and grades every call in the open. No performance claims; the record is being built in public.