Momentum Trading Strategy
Momentum Trading Strategy In this post I will show you how you can develop a simple momentum trading strategy and evaluate its potential use and statistics. This could be the good foundation for more advanced momentum trading strategies. The general premise this trading signal is that outperforming stocks keep to outperform in some time in a particular market and vice versa for underperformers. In this momentum trading strategy, we going to buy outperformers and short underperformers. So, let’s start. First, we need to import our packages. 1. import yfinance as yf 2. import pandas as pd 3. import numpy as np For building our trading strategy we need to find our top outperformers and underperformers among a group of stocks or index. I use SP500 socks for this example. We need to pull all SP500 members historical data. You can find the list of SP500 stocks from the below address and save it as .csv format. SP500 li