When it comes to indicators I definitely have come round circle during my evolution as a trader. Like most of us I started out like a kid in the candy store, especially during the early ThinkOrSwim years, which opened the flood gates on the availability of advanced tools for lowly retail traders.
I didn’t feel particularly inspired to post a market update today, so let’s mix things up a little and talk about trend trading. I wager that you’re familiar with the careers of world renowned trend traders like Ed Seykota, Tom Basso, Richard Dennis, or Bruce Kovner, which means you probably understand the basic paradigm behind ‘buying high and selling low’.
I was chatting with my quant buddy Tony a week or so ago and he asked me what ‘MOMO’ meant, which kind of had me stumped. In my mind it was an abbreviation for ‘market momentum’ but obviously this doesn’t make any sense. I was trying to figure out where and how I had absorbed that term and couldn’t figure it out. Nevertheless I have used ‘momo’ for many years now without thinking about it, which goes to show that we all fall prey to intrinsic habits and more often than not aren’t even aware of it.