Momentum is the rate of change of an instrument’s price. We’re not concerned about the direction of price; we’re only concerned about the pace of the change itself.
As price increases or decreases, the swing trader wants to see this change mirrored by momentum.Rising or falling momentum can be a box that’s ticked prior to the decision to trade.
The basic principle of the first backtest was the premise that buying an ETF of a country’s equity index that had previously performed well would produce profits.