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Momentum — buying what's already working

Stocks that rose over the last 6–12 months have tended to keep outperforming. Momentum has decades of academic support at the portfolio level.

A trading skill, taught as a rule + its measured base rate. Educational — never a recommendation to buy or sell.

Momentum is the tendency of recent winners to keep winning over the medium term. Measured as positive 6- or 12-month return, it is one of the most robust factors in the academic literature — documented across decades, countries, and asset classes.

The catch: it’s a portfolio effect

Momentum’s edge is real on average across many names, not a promise for any single stock. Individual momentum names can reverse hard (“momentum crashes”). So it’s a tilt, not a guarantee — size and diversification matter.

Pairs well with trend

Momentum and the 200-day filter overlap: both say “go with strength.” Reading their measured lifts together tells you how much is genuinely additive vs the same effect counted twice.

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The 200-day line — trend as a filter
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Educational content on trading concepts and their historical base rates, measured on survivorship-free US-stock history. Past statistics do not predict future results; nothing here is investment advice or a recommendation to buy or sell any security.