I've always had an inclination to see the way that price moves as being like the way in which a particle/object moves. For example, suppose you had a car moving along a straight road. Then the following assumptions may be made:
- Unless acted on by some force, the car will continue moving in the same direction, at the same velocity, forever (Newtons First Law of Motion). This means that prices would hypothetically trend in a given direction, at a given rate, forever unless acted on by some external force.
- The direction of the vehicle cannot change instantly. By which, I mean that a car travelling on a straight line in one direction at 100mph could not suddenly change direction - it would have to slow down first (I.e. Lose its directional momentum). Applying this to the way price moves, we could make the assumption that a trend will never reverse instantaneously - it must slow down (give a signal that the trend is ending) first.
If this way of thinking holds any merit, then there would be a multitude of other physical laws which could be applied to develop my way of thinking about the market. However, I'm unsure of whether this comparison makes sense.
What are your thoughts on this?