At Lightspeed, we do so much more than offer some of the best stock trading platforms in the industry. We also provide educational opportunities for traders of all levels to help them gain a better understanding of innovative marketing tools and strategies. Recently, we hosted a webinar titled “Momentum Trading by Warrior Trading.” During his presentation, guest speaker Ross Cameron — owner of Warrior Trading, a community of professional day traders — gave attendees an overview of his momentum trading strategies. He also demonstrated how hotkeys in Lightspeed Trader, our flagship trading platform, help to facilitate his trading activities every day.
Ross began with a brief explanation of momentum trading. Essentially, this form of trading involves monitoring stocks experiencing significantly strong movement — typically, upward trends. Momentum traders will pay close attention to the news and note developments that may influence these stocks while also carefully watching sales.
Depending on how fast the stock moves and when it plateaus or reverses, a trader using this strategy may hold a position for minutes, hours, or even a whole trading day. The trader then maintains profitability by finding an opportune exit point.
In his presentation, Ross noted a number of tips and observations that can help traders engage in momentum trading successfully. For example, rather than trade large cap stocks that only move 2-3% a day, like Apple or Netflix, Ross prefers to trade small cap stocks, which can move 20-30% a day. Due to this volatility, however, he mentioned that risk mitigation is key. Momentum traders often employ certain indicators to alert them when they risk losing profitability.
Ross’s typical day begins with checking a gap scanner, which for the most part identifies stocks that opened higher today than yesterday. He then pulls up his Level 2 windows, looking at the symbols he noted from his scan. Taking variables like market depth, price tiers, bid vs. ask spread, times and sales, and resistance into account, he’ll then determine if the stock is worth entering.
Throughout his presentation, Ross emphasized the importance of hotkeys for fast executions. The shortcuts he used most often were for buying, selling, and canceling. For example, in his hotkey for making custom orders, Ross set the “through” at .05 cents above ask, setting the number of shares at 2500. Then, if he uses the hotkey to buy a certain stock, the order will go through once it meets those conditions. Similarly, for his selling hotkey, he might set the “through” at .05 cents below bid. Lightspeed users can also create custom settings to sell all or portions of their shares at certain levels of profitability.
The webinar “Momentum Trading by Warrior Trading” can be viewed in its entirety here.
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