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.

RELATED TERMS
  1. Pure Play

    A publicly traded company that is focused on only one industry ...
  2. Forex Trading Strategy

    A forex trading strategy is a set of analyses that a forex day ...
  3. Take A Report

    A slang phrase signifying that an individual's trade order has ...
  4. Active Trading

    Active trading is the buying and selling of securities with the ...
  5. Buy And Hold

    A passive investment strategy in which an investor buys stocks ...
  6. Trader

    A trader is an individual who engages in the transfer of financial ...
Related Articles
  1. Trading

    Momo Shares Fall Sharply After Earnings Disappointment

    Momo may have reported strong third quarter financial results, but investors were not impressed.
  2. Trading

    The 5-Minute Forex "Momo" Trade

    Learn this simple momentum strategy and its profit-protecting exit rules.
  3. Investing

    Top 10 Internet Stocks for 2016 (BABA, AMZN)

    Internet stocks are one of the most exciting areas for investors in 2016, given the ability of these stocks to reach millions of customers, and their high margins.
  4. Trading

    Alibaba Stock Looks to Break Out From Key Support

    Alibaba shares moved sharply higher on Tuesday to key resistance levels, setting the stage for a potential breakout.
  5. Investing

    These Techs Have Left FAANG Stocks in the Dust

    Mythic Dragon: China tech stocks' 56% gain this year is double the S&P techs
  6. Investing

    What Type of Trader Are You?

    There are different trading strategies that investors use to profit from market movements. Which of these strategies for buying and selling do you use?
  7. Trading

    Introduction to Types of Trading: Fundamental Traders

    Fundamental trading is a method by which a trader focuses on company-specific events to determine which stocks to buy and when to buy them.
  8. Trading

    10 Forex Misconceptions

    The currency markets are full of myths that can harm a trader's chances at success.
  9. Investing

    How To Outperform The Market

    Active trading is an investing style that aims to beat the market. Find out how it works, and whether it will work for you instead of buy-and-hold.
  10. Investing

    How To Approach Momentum Trading Like A Pro

    Momentum markets generate high-reward high-risk environments that confound traders until they employ specific risk management practices.
RELATED FAQS
  1. What is a pure play?

    A pure play is a company that invests its resources in only one line of business. As such, this type of stock has a performance ... Read Answer >>
  2. Is there a buy-and-hold strategy in forex, or is the only way to make money by trading?

    Typically there are different ways to trade in most markets. Traders have been classified into three groups, primarily based ... Read Answer >>
  3. What Does Buy and Hold Mean?

    Buy and hold is an investing strategy focused on growing money in the long term while ignoring day-to-day fluctuations in ... Read Answer >>
  4. How do traders implement the Buy a Bounce Strategy?

    Learn how traders execute the buy a bounce strategy for a security that has reached an important support level. Find out ... Read Answer >>
  5. What Does It Mean When There Is 'Price Action'?

    Price action refers to the day-to-day fluctuation in the price of an asset. Read Answer >>
Hot Definitions
  1. Ethereum

    Ethereum is a decentralized software platform that enables SmartContracts and Distributed Applications (ĐApps) to be built ...
  2. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
  3. Financial Industry Regulatory Authority - FINRA

    A regulatory body created after the merger of the National Association of Securities Dealers and the New York Stock Exchange's ...
  4. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs are often issued by companies seeking the capital to expand ...
  5. Cost of Goods Sold - COGS

    Cost of goods sold (COGS) is the direct costs attributable to the production of the goods sold in a company.
  6. Profit and Loss Statement (P&L)

    A financial statement that summarizes the revenues, costs and expenses incurred during a specified period of time, usually ...
Trading Center