Momentum Investing Engine - Suggested enhancements
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Hi Prashant,
Firstly, thanks a lot to you and Definedge team for creating great value for the investor community. I have been following and learning from Definedge and Weekend Investing (Alok Jain) videos from the last few years and practicing momentum methods based on my learnings.
The Momentum Investing Engine is truly powerful, enabling individual investors to manage funds professionally and automatically.
I back tested with my P&F strategy using MI engine and it validates the idea of momentum investing. (2014-2025)
However , I believe certain enhancement options can give more momentum riding options for users:
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In the market trend filter - if the market trend doesn't qualify for equity stocks then if any other asset class ; lets say gold is having momentum- it gives an option to exit as per rules from current equity and switch to gold. Since we are trading momentum hence asset classes should also not matter. Moreover, it makes money more efficient ,an added advantage of using momentum strategies
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In relative momentum option, using P&F give multiple box values to check this strength. This will give a good filtration for only strong momentum basket items across time range
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Flexibility in adding rank criteria as per own comfort technical parameters : For example using P&F rules in MI engine, one might have a better understanding of possible momentum using ADX . So I would prefer ranking stocks using ADX (rising and above average- for example and +DMI crossover -DMI) rather than Volar/RSI
Some Questions about using MI engine for MI Trading:
a) Is it possible to exit one stock based on rule and then again add to basket another stock immediately after exit from the current ranked list of stocks as replacement? How to execute it using MI trading engine? Rebalancing happens on every exit for replacement of the exited stocks
b) Is it possible to check the above scenario some workaround way in MI trading simulator?
Looking forward to your views and recommendations.
Thanks.
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Also, can we introduce Reinvest + SIP option . Currently its either or.
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also for momentum trading , would adding market breadth as a parameter to stop new entries in addition to the overall market trend filter would reduce drawdowns? Please add more user customization options like these : like adding breadth as additional market filter for new entries, using adx for ranking , etc would help every individual user leverage their strengths and comfort
