RealTest NASDAQ Momentum Rotation

Why it rotates into strength

Stocks that are already leading tend to keep leading for months at a time, and NASDAQ 100 names trend more cleanly than the broad market when risk appetite is high. The strategy ranks the index each month and holds the strongest, then rotates out of a stock once it falls out of the ranking. It stays with what is working rather than trying to call tops and bottoms.

How the ranking works

A basic momentum rotation ranks stocks by a single return period, which often rotates into names that have just run up and are ready to stall. This strategy scores momentum across two timeframes at once, so it selects stocks that have shown steady strength rather than a single sharp move. Each top-ranked stock also has to pass an entry filter before it is bought, and any that fail are skipped for that month regardless of rank. The backtest runs from 2000 on survivorship-free Norgate data with Interactive Brokers commissions and per-side slippage included.

How it fits your trading

This is a growth-oriented strategy that leans into strong trends, so it does its best work in sustained bull phases. Two controls keep that in check. The entry filter holds it back when the setups are weak, and position size scales down automatically when the index itself turns shaky. It runs in a few minutes once a month, and it pairs well with a mean-reversion or defensive strategy that behaves differently in a downturn.