Momo Play

DEFINITION of 'Momo Play'

A slang term used to describe an advanced trading strategy based purely on momentum. In a momo play, the trader is not interested in the company's fundamentals, only in the short-term direction of a security's price movement. As such, momo plays are used solely by day traders, not by buy-and-hold investors.

BREAKING DOWN 'Momo Play'

An example of a momo play is the five-minute forex momo trade, which is a fast trade based on identifying a momentum burst on five-minute charts. In this play, a forex trader tries to make money from an extension move but will exit the position as soon as it appears to be weakening in order to protect profits.