Momentum

The tendency of a security's price to continue moving in its current direction. Momentum trading, one of the oldest systematic strategies in finance, buys recent winners and sells recent losers based on the empirical observation that trends persist over intermediate time horizons. Academic research dating back to Jegadeesh and Titman's 1993 paper has confirmed momentum's effectiveness across asset classes and geographies, though the strategy is prone to sharp reversals during market turning points.