How Momentum Traders Detect the Big Moves

Using technical analysis is a lot like being a detective. When you look closely at a chart, you often notice small “clues” right before the market decides whether to reverse or continue its trend. Swing traders in particular try to spot these signals, aiming to step in a little earlier and capture the bigger moves.

Momentum traders spend countless hours, my wife can confirm, staring at charts, learning how these subtle patterns start to “speak” to you over time. Maybe it’s a change in volume, a candlestick formation, or the way price hesitates at a certain level. Everyone notices different tells.

One example is the hammer candle - a small body with a long lower wick that shows sellers pushed the price down, only for buyers to step in and drive it back up. On the chart, you can see a repeating pattern:

Pause (about 5- 7 candles sideways) – the market takes a breather.

Hammer forms – sellers test the lows, but buyers reject it.

Momentum move – price springs higher, kicking off the next swing.

Some traders don’t even need the patterns spelled out, they just follow the feel of price action. But whether by instinct or by clues like the hammer, the goal is the same: catching the move before it really takes off.