Momentum Trading

Initial Appearance: Price & Volume

Price
1. 6-month High (Pref 52-Week High)
2. Surge in Price (Price Gain > than the last 2 months) price ^ 5%-10%

Volume
1. Volume Spike > than Historical - Breakout in Volume
2. More than PHP 40M in Turnover

*Normally coming from a Base/Consolidation/Duration

If a stock is breaking out without volume - tayo tayo lang yan - there’s no follow through.

Don’t Momentum Stock that are already below 10 EMA because when they are falling it’s totally
different.

​Buying Point: Breakout vs Pause Days

Breakout
1. Hard to Participate unless Aware (News, Catalyst, Disclosures)
2. Must be Fast/Quick
3. Risk is Harder to Define (Chasing Prices)

Pause Days
1. Ranges becoming smaller (<25% of the Up move)
2. Risk is easy to define
3. Confidence level -> Very high
Pause Day Setup - Slingshot

Entry
1. Ranges -> Becoming smaller (Less than ~25% of Upmove/Breakout)
2. Wait for Doji/Upstick - Buy on Break
3. Volume Becoming smaller and Smaller
4. 1-3 Pause Days

Risk
1. Small Range Low
2. 0.5% ​VAR

Risk Management
Betting Size
VAR@0.5%

Example:
Account Size Php 10.0 Mil
VAR(0.5%)=50K <--Willing to lose up to 50k(MAX)

Entry: 10.50/share
Stop Loss: 10.00/share

VAR/(Entry-Stop Loss) =# of Shares

50000/(10.50-10.00) = 100k Shares

Selling Point: Surges vs Trailing Stops

Surges
1. Can sell half at significant gains (Near the close of first day breakout)

Trailing Stops
1. Exit @ break of 50 EMA