Hey everyone, Barrie here. Welcome to another edition of trading insights that could make a real difference in how you approach the markets. Today, we’re diving deep into the world of momentum trading and how it can help you identify stocks that could be on the verge of a big move.

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First things first, let’s talk about momentum scans. These tools are critical for traders who want to catch the big waves before they happen. For instance, I use a specific scan that highlights the relative strength leaders from the previous close. What does that mean? It’s simple: these are the stocks that finished strong in the last session, showing more resilience or growth compared to others. It’s like finding the athletes who had the best performance in the last game and are primed for another big one.

Take Benf for example—a stock that recently showed a whopping 407% move! Now, why did it spike like that? It’s not always clear in real-time, and as traders, we might not always catch the initial pop. But here’s the kicker: it’s not just about catching the start, but also about understanding the play. Benf had several halts due to its dramatic rise, likely influenced by a reverse split and possibly some compliance achievements with NASDAQ.

Trading such volatile stocks isn’t for the faint-hearted. It involves looking for signs that a pullback to a moving average or another key indicator might offer a new entry point. For example, after Benf’s initial surge and halts, it pulled back sharply. That’s where I look closely—if it stabilizes near a moving average or the VWAP (Volume Weighted Average Price) and holds, that might be my cue to jump in, albeit with fewer shares to manage risk because, let’s be honest, you can get stopped out pretty quickly if it turns against you.

Momentum trading is not just about finding stocks that are moving; it’s about understanding why they are moving, how they move, and how you can potentially profit from their moves while managing risk. It’s about not getting caught up in the hype but instead focusing on solid trading principles.

Alright, guys, that’s it for today. Keep an eye on those scans, look for the high performers, and always plan your trades with caution and strategy. Have a wonderful weekend, and let’s catch up on these ideas Monday. Remember, trading is as much about the right moves as it is about the right mindset.

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