High volatility during the bull market of the 1990s made the momentum trading very popular.
The idea is to jump abroad a fast-moving stock as it begins to run and hop off after it slows down.
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The Impulse System flags those bars where both the inertia and the momentum point in the same direction. When both the EMA and MACD-Histogram (below zero) rise, they show that bulls are roaring and the uptrend is accelerating. When both indicators fall together, they show that bears are crushing the market.
Using 13-day EMAà tracking market inertia
12-26-9 MACD-Histogramà its slope reflects changes of power among bulls or bears.
