You are already on the wrong foot by starting off with the...

You are already on the wrong foot by starting off with the physics definition of momentum and formulas. In finance, it is completely different. It is just the concept that is similar. You are better off reading and researching about "trend-following".

Oh ok, because the term momentum seems to imply something different from what this theory actually does and seems to be quite misleading.


There is no indication given by this analysis that the trend wont end immediately after you purchase the stock
Yes exactly. Trend-following philosophy is based on the premise that one cannot forecast accurately. Trend-followers do not know when to enter at the bottom or exit at the top. It is to capture any trend that starts to develop based on an objective, rules-based approach.


If this is true it's equivalent to purchasing a random stock at a random point in time and simply selling it if it goes down.