A change in trend is not an event; it is a process that has several stages which can be followed. It’s a bit like throwing a ball up in the air; before the ball reverses from up to down, its upward momentum slows, then stops, then slowly reverses at first.
Many traders have a basic understanding of momentum. But, we think most traders would benefit from three tweaks to the traditional thoughts on the topic. In fact, in our proprietary trading system, momentum helps to identify and confirm the context; and, as such, it is the link between historical prices and the short term signals. Traditional Momentum … Three Times the Speed