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Encyclopedia of Finance pp 700–704Cite as

The momentum trading strategy

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Abstract

A strategy that buys past winners and simultaneously sells past losers based on stock performance in the past 3 to 12 months is profitable in the U.S. and the European markets. This survey paper reviews the literature on the momentum strategy and the possible explanations on the momentum profitability.

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References

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Acknowledgement

The author would like to acknowledge financial support from the Research Grants Council of the Hong Kong Special Administration Region, China (HKUST6233/97H).

Author information

Authors and Affiliations

  1. Hong Kong University of Science and Technology, Kowloon, Hong Kong

    K. C. John Wei

Authors
  1. K. C. John Wei
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Editor information

Editors and Affiliations

  1. Rutgers University, New Brunswick/Piscataway, USA

    Cheng-Few Lee

  2. San Francisco State University, San Francisco, USA

    Alice C. Lee

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© 2006 Springer Science+Business Media, Inc.

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Wei, K.C.J. (2006). The momentum trading strategy. In: Lee, CF., Lee, A.C. (eds) Encyclopedia of Finance. Springer, Boston, MA. https://doi.org/10.1007/978-0-387-26336-6_71

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  • DOI: https://doi.org/10.1007/978-0-387-26336-6_71

  • Publisher Name: Springer, Boston, MA

  • Print ISBN: 978-0-387-26284-0

  • Online ISBN: 978-0-387-26336-6

  • eBook Packages: Business and Economics

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