Momentum trading is probably the most mainstream of all swing trading strategies. This is because it works best during bull markets, and history is riddled with longer durations of bull markets than bear. It's also the easiest to execute and pivot points are the easiest to identify visually.

The most important lesson I've learned in my 10-year trading career is this: Do not tell the market what it's supposed to do; instead, let the market tell you what it is going to do. It's easier said than done. Most people put their ego and convictions ahead of prudent risk management, investment flexibility and a true assessment of market conditions.

As much as you should be aware of target prices where you decide to lighten up/sell your stock trading positions when you are ahead, you should be aware of price levels where you "throw in the towel". This price level is what we call a stop-loss. As traders, we have limited capital and allowing it to deteriorate is a big no-no.