when applied an investor can buy or sell based on the strength of the trends in an asset s price if a trader wants to use a momentum based strategy he takes a long position in a stock or asset that has been trending up if the stock is trending down he takes a short position instead of the traditional philosophy of trading buy low sell high momentum investing seeks to sell low and buy lower or buy high and sell higher instead of identifying the continuation or reversal pattern momentum investors focus on the trend created by the most recent price break 
special considerationssome tools for momentum investors help to define the trend such as the trend line a trend line is a line drawn from the high price to the low price or vice versa over a given time period if the line is up the trend is up and the momentum investor buys the stock if the trend line is down the trend is down and the momentum investor sells the stock 3in this way momentum investing is purely a technical indicator though momentum can refer to fundamental measures of performance such as revenue and earnings it is most commonly used in reference to historical asset prices as a technical indicator 4just like any other trading style there are risks that come with momentum trading by using this technique you should know that you are trading on the backs of other people in the market and price trends are never guaranteed and always be prepared for unexpected reversals or corrections that take place this can happen because of unexpected news or changes in investor sentiment in the market 