Behavioral: momentum strategies

Can anybody comment, i.e. agree/disagree/elaborate, on the behavioral finance reasons for trading on momentum: 1. representativeness: the market is going up --> the market will continue to go up 2. overconfidence: i’ve been trading this market for years, i know it will continue to go up 3. correlating emotions with market/irrational exuberance: i am excited about this market so will continue to invest more 4. aversion to ambiguity: i see this market going up, so this is enough reason for me to invest in it What are CFAI proven reasons for momentum strategies? Thanks

momentum strategies are usually an expression to aversion to ambiguity. you see the market going up so now you have something to relate to, and think that the odds are better that it will keep on going up

aversion to ambiguity could imply that investors time the market… Correlating emotions with market exuberance to me is easier to understand and relate to.

momentum traders is an example in schweser for aversion to ambiguity

yea, but i wouldn’t bet my lunch on schweser. It all depends on how you argue it.