Chapter 3: Investing Strategy Engine
by PRASHANT SHAH -
“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.” – Abraham Lincoln. In this section, we begin our journey toward developing a momentum investment strategy. I call this journey because it is a stepwise explanation of the entire strategy and is backed by data and ... Read more
Chapter 4: Relative Momentum
by PRASHANT SHAH -
“While standard economics assumes that we are rational, making logical & sensible decisions, the fact is we are far less rational, and our irrational behaviours are systematic and predictable.” – Dan Ariely Relative strength is a very interesting and useful subject. I have a firm belief that it can change the way you trade and ... Read more
Chapter 5: Improvements
by PRASHANT SHAH -
“Don’t worry about what the markets are going to do, worry about what you are going to do in response to the markets.” – Michael Carr We now have a decent strategy in place. While practicing the strategy and observing how stocks perform, I explored many other possibilities. There is no perfect strategy that works ... Read more
Chapter 9: The Blueprint
by PRASHANT SHAH -
“Great things are done by a series of small things brought together.” – Vincent Van Gogh We have discussed and developed a momentum strategy engine—an innovative tool to create and implement momentum investing plans. Our momentum investing plans integrate both absolute and relative momentum approaches. We analyse the strength of individual securities, their momentum, relative ... Read more
Chapter 10: Backtesting
by PRASHANT SHAH -
“History doesn’t repeat itself, but it does rhyme.” – Mark Twain Thus far, we have discussed the process of developing a momentum investing strategy plan. It was a stepwise explanation to develop a plan that was important to understand the momentum investment process. We have discussed the following- We studied popular strategies and combined them ... Read more
Chapter 11: Execution
by PRASHANT SHAH -
“The wise see knowledge and action as one; they see truly and go beyond death.” — Brihadaranyaka Upanishad Thus far, we have discussed different momentum investment strategy and their backtest results in detail. We need to ensure better execution of the strategy to capitalise its potential. Have a look at Image 11.1. Let’s assume it’s ... Read more
