There are two steps to momentum trading... First, identify the trend / range. Second, identify early momentum. Here is a method to catch momentum within a trend... https://www.elitetrader.com/et/thre...m-trading-strategy.310899/page-5#post-4482902
In physics, momentum is mass x velocity. How are you defining and measuring momentum? Are you saying that trial and error is the only type of problem solving that is being applied to the markets? You use analogies of ‘live’ and ‘dead’. Are you expressing a belief that the market has characteristics of being organic and ‘alive’? At the risk of being tangential to the points you are making, there are multiple patterns that shows up everyday as the sun rises, the two most easily discerned are - the catenary and ohlc. What is your definition of pattern? From my experience, momentum itself exhibits a pattern. It's symmetrical both long and short. As for stop loss being a fixed loss, that's true. It also could be considered as a defined max loss prior to entry similar to options. Without a defined loss, while it's possible to wait out a trade to get to positive in any position, that is more a function of account size and conviction than trading skill. Maybe I'm misunderstanding the points you are making.
%% Good Wave; turtles move funny until they get in a wave, or Wave.Its not random or a prediction, but a good weather forecaster/seasonals can help. Some may call it weather prediction....... but no weather man or woman does that LOL
I think efficient market theory holds in the long-term. Long-term assets tend to go to their proper value, but short and sometimes medium term fear, greed, and the effects of leverage are much more dominant factors than the fair and unbiased evaluation of value based on all known information. If traders could not trade on margin, I suspect that markets would be more efficient in the short term and also more predictable. However, the cost of capital would also be higher in that case as well. Leverage is the sacrifice of stability with the goal of obtaining higher growth by lowering the cost of capital. Just my speculation...
This seems to all be classical Newtonian thinking. Why not get with the times and add time to your equation? Get to at least the Einstein levels of physics, man. Time must fit into your equations, else all you proffer is bunk.
My understanding is EMH is a perfectionist theory where it assumes the market price is precise leaving no scope for investors to gain edge. Critics says that people like Warren Buffet had already proved this theory is wrong by beating the market or in other words demonstrated that the price is undervalued. There is always tug off war between perfectionists and creative people. Time and again creativity and innovation wins. My point is both stock trading and stock investments are businesses and any good business blends technicalities and creativity in a balanced way.