Momentum Rotation Strategy Template
Companies whose share price has been climbing steadily often keep climbing for a while, so long as you have a plan for the day they stop.
Start from this templateWhat this plan does, rule by rule
- Sorts eligible companies by how strongly their share price has been climbing over recent months, and holds the strongest.
- Holds a deliberately short list, because spreading across too many companies waters down the effect the plan is built on.
- Reviews on a fixed schedule so the decision to switch is made by the rule, not by how the week felt.
- Sells a company when its climb reverses past the loss limit you set, and replaces it with one that still qualifies.
- Caps how much of your account any single company can take.
Who this suits
You are comfortable with a plan that trades more often and moves between different companies as conditions change, and you want those moves governed by written rules rather than your mood on the day.
Who it does not
If you want to buy a few companies and leave them alone for years, this is the wrong template. It trades more, it pays more in fees, and it can turn quickly when the market changes leadership.
How it behaves
- Follows companies that are climbing
- Style
- Higher
- Risk
- Every week
- Review
What to watch out for
- This approach turns fastest and hurts most when market leadership changes suddenly. A plan that led for two years can lag badly in a single quarter.
- Trading more often costs more. Fees come out of every trade, so this plan has to earn enough to cover its own activity before it is ahead.
Questions people ask
What does this plan buy?
Companies whose share price has been rising steadily over recent months relative to everything else it could hold. It is following what the market has already been doing rather than predicting what it will do next.
Is this suitable for a beginner?
It is understandable by a beginner, but it is not the gentlest place to start. It trades more, it swings more, and it asks you to sit through reversals without abandoning the rules. A steadier template is a kinder first plan.
What happens when the market turns?
The selling rules fire and the plan rotates out of what stopped working. That is the design, but it means you will sometimes sell a company shortly before it recovers. Reading the history test will show you how often that happened.
Start here, then make it yours.
Load the template, swap in companies you believe in, and test the change on real history before it runs anywhere.
Start free