Why Does Momentum Exist? | Momentum Trading Strategies | Quantra Courses скачать в хорошем качестве

Why Does Momentum Exist? | Momentum Trading Strategies | Quantra Courses

Ready to go from trading intuition to AI-driven, backtested, and automated strategies? Join the AI AlgoTrader Bootcamp (4-day, 16-hour live workshop) and learn Python-based strategy building, responsible ML, risk management, agentic AI workflows, and how to eliminate hidden biases. Enroll now (limited seats, starting soon): https://www.quantinsti.com/algorithmi... . . This video is the preview of our course on Momentum Trading Strategies. https://quantra.quantinsti.com/course... Timestamp: 00:11 - Slow diffusion of news 00:22 - Occurrence of momentum 00:42 - PEAD Strategy 01:53 - Futures Market Welcome to this video lesson in the second part of why momentum exists? After completing this, you will be able to explain the following reasons for the existence of momentum. Information flow, analysis, and reaction are not symmetric. Everyone analyses the news and takes action at a different pace. And this results in momentum. When can momentum due to this occur? his momentum can be seen in scheduled events or during news releases. For example, FED meetings, auction dates, release of economic data such as unemployment data, and corporate earnings announcements. What kind of strategies can be used to profit from it? There is a very well-known strategy used by many hedge funds on corporate earnings announcements and is known as post–earnings-announcement drift (PEAD). In this strategy, as you would have inferred, post the earnings announcement the stock continues to drift towards the earnings surprise. Let’s take a look at Disney’s example: Disney is a well-known entertainment conglomerate. In addition to their movies and theme parks, it has acquired quite a few companies on its own. On November 7, Disney’s price was $132 when it released its fourth-quarter earnings report beating estimates of both revenue and profits. Thus, as a potential trader how can you benefit from it? You can buy Disney after the earnings are announced as the revenue and profits are above the estimated numbers. Well, as expected, the stock price climbed to $148 on November 13. After a while, the stock price declined. Despite the decline, the share price climbed to $151 on November 26. Hence if you had gone long on Disney, you could have made a decent gain in the month of November. Let’s move to the next reason now. Momentum trading is very prevalent in the futures market and many commodities traders are trend followers. Do you know the reason for that? This is due to the persistence of roll returns. In the futures market, the roll return is the difference between futures returns and spot returns. And for a long period of time, the sign of roll returns don’t change. So if roll returns are positive then you simply long it and profit from it. And similarly, if the roll returns are negative you can short it. This strategy is covered in detail along with implementation in the later part of this course. Quantra is an online education portal that specializes in Algorithmic and Quantitative trading. Quantra offers various bite-sized, self-paced and interactive courses that are perfect for busy professionals, seeking implementable knowledge in this domain. Find more info on - https://quantra.quantinsti.com/ Like us on Facebook:   / goquantra   Follow us on Twitter:   / goquantra