The untrained eye sees continuous price change but trends last only a short time compared to constricted ranges. During one phase of Rambus' February move, the stock printed 15 trend bars compared to 53 sideways range bars. Without excellent timing, momentum traders have many opportunities to fail. Sharp trends print wide range bars and many gapping moves. This volatility increases risk and inhibits safe entry-exit planning.
Swing traders rely on support-resistance to define execution and reward targeting.
Momentum markets often display no common landscape features at all. This requires entry without a clear violation level that proves that the setup was wrong. In this blind environment, arbitrary stop losses may be the only way to keep the speculator out of intense danger. Momentum trading can be mastered. Profit depends upon detached and disciplined execution.