Our strategy relies on the well-proven methods employed for over a century by some of the greatest traders in the US, including:

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1. Jesse Livermore

2. Nicolas Darvas

3. William O’Neil

4. Mark Minervini

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The strategy can be divided into the following parts:

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Stock-Picking

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Our stock-picking is based on a techno-funda approach, where fundamental analysis helps us find stocks showing strong growth in revenue and profits, belonging to a strong sector with potential to do well. Technical analysis helps us time our entry into these stocks at a low-risk and high-probability level.

To time our entries, we use the basic assumption of technical analysis, which states: stock prices move in trends, and once trends are established, they tend to continue for some time.

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Risk Management

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While stock-picking is important, a major part of our edge comes from robust risk management. It is a well-established fact that trading stocks is a game of probability. Nobody knows with certainty which stock will go up or down. This is where good risk management helps us.

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Our risk management system ensures that when we are wrong, we lose little, whereas when we are right, we gain big. It is the cornerstone of any successful trading strategy.

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Position Sizing

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While position sizing is not rocket science, most market participants tend to ignore it due to its simplicity. Our quantitatively derived position sizing model ensures that losses remain small and gains are significant.

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Psychology

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While the elements discussed above are important, they are useless if one does not manage their psychology properly. When money is on the line, our mind can become our biggest enemy.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

It is crucial to manage our psychology, and this is where our role comes in. We provide our clients with regular updates and help them manage their psychology effectively.

In short, our strategy can be summarized as follows:

1. Buy strong stocks that are moving up at low-risk entry points during uptrending markets

2. Cut losses short

3. Let winners run

4. Manage position sizing like a pro

5. Let our mind be our friend and not our enemy

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If you have any further questions about the strategy, feel free to reach out to us at help@momentuminvesting.co.in