Initial Capital

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Monthly Injections

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Total Injected

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Total Invested

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Backtest Duration

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📈 Stock Selection (Monthly)

Every month, the strategy analyzes all selected stocks and calculates their 6-month momentum (price change over the last 6 months). It then selects the top 2 stocks with the strongest momentum, plus core holdings (AAPL/MSFT if selected). This ensures we're always invested in the stocks showing the strongest upward trends.

🌊 Market Regime Detection

The strategy checks SPY's 6-month momentum to determine if we're in a bull or bear market. In bull markets (SPY momentum positive), capital is fully deployed. In bear markets (SPY momentum negative), the strategy moves to 100% cash to protect capital from major drawdowns.

🛡️ Dual-Layer Stop-Loss Protection

Two levels of protection work together to limit losses:

• Daily 20% Stop-Loss: Immediately exits any position that drops 20% or more from entry price (catastrophic loss protection)
• Bi-weekly 10% Stop-Loss: Every 2 weeks, exits positions down 10% or more (moderate loss management)

💰 Capital Management

Your initial capital plus monthly injections are divided equally among selected stocks. Positions are rebalanced monthly - selling underperformers and buying new momentum leaders. This systematic approach removes emotion and ensures disciplined execution.

✨ Why This Works

Momentum investing is backed by decades of academic research showing that stocks with strong recent performance tend to continue outperforming. By combining momentum with bear market protection and stop-losses, this strategy captures upside during bull markets while limiting downside during corrections. The result: smoother returns with controlled risk.