well i love your curiosity. its somewhat technical, but i will try my best to shed more light on that. but since we cant possibly talk all about momentum trading here. what i will do is tell you the DON’Ts. the more you know about how NOT to do something, the more you get towards perfection on that.
meanwhile volatility is different from momentum. Volatility is associated with speed, momentum is associated with force. something is pushing the price you see on the chart and that is Momentum, nothing more. you cannot predict the market. here is an equation that covers everything;
demand + supply + investors perception of the result = Price
The net result of adding demand to supply is what produces ‘‘Momentum’’. investors then add more force and that’s what pushes the price in a certain direction with a certain volatility.
Build a strategy that can help you decipher this momentum. Where the momentum is, there the future price will be.