158 Physical Momentum

Many trading platforms refer to momentum as the change in price (a.k.a speed), the relative version of which is call Rate of Change (ROC). In Physics, however, momentum is speed times mass. It aims to capture the inertia with winch an object will move given its speed and mass. Think of a small car and a large truck (Different masses), moving at the same speed. If you were to break both automobiles at the same time, given the larger mass, the truck will move further. In trading, one could think of volume as the mass, and this indicator simply measures momentum as it is meant in physics: velocity times volume.

Commoly, the start of a big price movement should coincide with a large Physics Momentum, there is motivation/interest in the trend of the current price.

Figure 14.28: Physical Momentum