Trend-Range Axis: The untrained eye sees continuous price change but trends last only a short time compared to constricted ranges. During one phase of Rambus' February move, the stock printed 15 trend bars compared to 53 sideways range bars. Without excellent timing, momentum traders have many opportunities to fail.

Sharp trends print wide range bars and many gapping moves. This volatility increases risk and inhibits safe entry-exit planning. Swing traders rely on support-resistance to define execution and reward targeting. Momentum markets often display no common landscape features at all. This requires entry without a clear violation level that proves that the setup was wrong. In this blind environment, arbitrary stop losses may be the only way to keep the speculator out of intense danger.

Momentum trading can be mastered. Three disciplines will break destructive habits and reprogram trading for success:

- Abandon the adrenaline rush: Forget the excitement. Profit depends upon detached and disciplined execution.

- Learn the numbers: The nature of price movement must be ingrained deeply enough to allow spontaneous decision-making during the trading day.

- Cross-verify: Objective measurements must filter unconscious bias.

Reduce momentum risk through 3-D charting. Identify reward for the time frame of interest. Confirm that the stock shows no important divergences that may signal the end of the move or an impending reversal. Then guide execution and position management through the chart in the next lower dimension. When a strong trend explodes on the daily view, use a 60-min bar to pick out low risk entry and define natural exit points. For intraday positions, control the 5-min bar breakout by using a 1-min chart to locate the natural swings.

Successful momentum strategy requires solid tape reading skills. Demand on the time and sales ticker reveals the inner workings of rapid price movement. Both retail (small lot) and professional (large lot) traders need to participate in a sharp trend or it will fail. Watch the crowd's response to support numbers very closely. If you can't feel their urgency to get on board, perhaps it isn't there. When the action pushes into uncharted territory, use round numbers to gauge demand. Multiples of 10 present strong resistance in place of classic support levels. Understand the motives of the big players that drive fast markets and ride their coattails to gain a needed edge. And if you see big lots move against a rally, be prepared to join them.

Time of day tendencies create profit and danger zones. As the market opens, overnight imbalance and fresh retail cash trigger volatility that resolves through price change. Insiders guide stop gunning exercises and fade trends through the lunch hour's negative feedback. The final hour arrives, just in time to resolve many complex themes with sharp breakouts or breakdowns. And through it all, intraday buying and selling oscillates in an orderly 90-min cycle.
 

Riding Intraday Swings: Intraday volatility shakes out day traders during a 3-hour, 16-point NXTL rally. Short-term price movement responds to numerous intermarket cycles that ensure a bumpy rise for the momentum crowd.