The trend-following project I mentioned entered its first round today with the following ten stocks:
AeroVironment $AVAV (+1,12%) , AppLovin $APP (+3,13%) , Innodata $INOD (-0,5%) , IREN $IREN (+6,43%) , Kraken Robotics $PNG (+12,89%) , Micron Technology $MU (+1,92%) , Oklo $OKLO , Ondas $ONDS (+2,56%) , Nebius $NBIS (+0,46%) and Robinhood $HOOD (+0,9%) . Each equally weighted, in a Trading212 Pie.
In my opinion, these companies had solid ratios and met the desired technical metrics (mostly beta > 1.5 ; 1M performance > 20% ; price > 50EMA).
Hopes / forecasts:
The model is designed to avoid the severe drawdowns that normally accompany high risk high reward stocks. The stocks have been selected so that all have a distance of about 15% from their 50d EMA.
To explain: the EMA is a moving average that reacts more strongly to trends or trend changes. In my experience, it often serves as support and a downward break may indicate a trend reversal.
This is theoretically perfect for this model: as long as the share is trading above its EMA, it is in a sustained uptrend (which the model wants to "surf" 🏄♂️); if it falls below it, it is sold. This mechanism therefore acts more or less like a dynamic trailing stop loss.
However, this should not happen immediately, as all shares are still above this average.
No investment advice, this is still an experiment. Updates to follow.