Momentum investing
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Dear Sir,
For momentum investing, my thought process is as below:
- use Eagle Price and RS Scanner on NIFTY 200 using 1%,2%,3% and 5% as MTF and save Stocks with Eagle score>15.
- Invest equal amount in each of top 20 stocks out of above saved group, if 20 or more stocks are qualifying. . so my per trade, investment would be 5% of my portfolio. Keep SL on D Smart on 3% PNF Daily chart in the system by way of GTT. If SL is hit on a particular stock, it is out. but I won't enter any new stock till next monthly scanner in its place
- Repeat Eagle scanner as in 1 above every month on a fixed date and if any of my invested stocks does not fall within new month's eagle score of > 15, it would be replaced by new stock > 15 Eagle score in descending order of Total Eagle score.
- The process goes on every month
- if in any month, my stock universe of eagle score > 15 falls below 20, say to 10, I would be invested in those 10 stocks only and my balance 50 % of portfolio would remain in cash.
- So there are 2 exit criteria in my system a. a stock falls below eagle score of 15 or b. stock falls below 3% dsmart WL.
Prashant Sir, the above is only my thought process. I wish to implement it with modifications, which you may please suggest.
I don't know whether my above thought process is back testable? plus I want to know whether one needs to include breadth study in above stratagy. If yes, which % box value? Please guide
