Strategy Session… Reviewing the Rules and Backtest of the Super-Charged Momentum Trend Strategy

     On Thursday July 23 2020, we ran a one-hour Strategy Session Webinar for our Super-Charged Momentum Trend Strategy.  This is the same Super-Charged Momentum Trend Strategy that we offer to Free Members of our site.  You can find the Daily Strategy Scan Signals, which are Daily Trade Ideas posted every single day that the market is open, here.

 

The foundational basis of the Super-Charged Momentum Trend Strategy is not a new one.  It is based on the simple concept of moving average cross-overs.  Of course, we use a few enhancements in order to get better than average results, and, the implementation as a portfolio-level Systematic Strategy with proper position-sizing and risk-management is what makes it all work in the real-world.

 

The Strategy Idea focuses on a short-term "momentum shift" condition with increased buying interest within the context of an uptrend.  We only focus on the long side trading in our implementation, for reasons described in the below video Webinar presentation.

 

The Super-Charged Momentum Trend fits within the "Momentum" and "Trend" (or "Trend Following") category of strategies... the idea that "the trend is your friend (until the bend in the end!)", and "momentum or trends persist" (long enough to have an edge and be profitable).

 

The Super-Charged Momentum Trend triggers typically after a short-term pull-back  condition in an uptrend, where the "momentum shifts" back to the high-side and where the expectation is that the uptrend will continue and resolve with a higher high because the stock is still trending, and the pull-back has completed.  In essence, you are attempting to get in at a relative discount but only after a new confirmation that price might be ready to resume higher so that the trade can continue to ride the next wave to the upside for a "swing trade".

 

The results of the Strategy over the past 20 years or so have been quite good.  As described in the backtesting section of the Webinar, the Strategy averages around 13-14% (risk adjusted to around 18-19% since it's in the market about 70% of the time) with about a 16% Maximum Drawdown but 10-12% Maximum Average Drawdowns.  That puts the CAR/MDD (or MAR Ratio) at around 0.80 before commissions.  Not bad!

 

You can learn more in the Webinar video presentation below, where we cover the following...

 

Review the Super-Charged Momentum Trend Strategy.

• Background
• Where does the SCMT Strategy Fit on the Trade Spectrum?
• Pre-Conditions. Implementation (EOD). Rules or “Setup”.
• What do real trades look like?
• Review the Backtest Results to answer the question “Does it have a positive Edge?” – SPOILER ALERT – Yes, it does!
• How you can Automate this strategy.
• Where you can find FREE daily trade signals for the SCMT Strategy.

 

Please enjoy the Webinar Video Presentation, and if you have any questions, feel free to contact us.

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