Section 1 · Stock Fundamentals
What Drives Stock Prices?
Why prices move — and what to watch for as a momentum trader.
An auction happening every millisecond.
At any moment, a stock's price is simply the last price two people agreed on. A buyer thought it was worth at least that much. A seller thought it was worth no more. The price rises when more people want to buy than sell, and falls when more want to sell. As a momentum trader, your job is to find stocks where demand is exploding right now.
3 things to know
Earnings reports, news, and FDA decisions can move a stock 20–50% in minutes.
Roughly 70% of all US stock trades are made by algorithms, not humans.
Social media can now move small stocks — retail traders have real power.
Key vocabulary — tap each card
Did you know?
In 2021, GameStop (GME) went from $17 to $483 in two weeks driven almost entirely by retail traders on Reddit. Demand overwhelmed supply. That is momentum trading in its purest form.