Find Popular Stories Relevant to Momentum Trading Code, Trading strategy and Backtest in Python [Momentum of ALL S&P 500 stocks].
Video is for educational and entertainment purposes only. This is not an investment advice!
Prior video on Momentum on the Dow Jones:
In this video I am building a trading strategy in Python from scratch. The strategy used is the Momentum strategy. You should have at least basic knowledge of Pandas and maybe have gone through some videos on my Python for Finance playlist to better follow along.
The momentum strategy is based on the findings of Jegadeesh/Titman and the conventional momentum strategy taking the past 12 month skipping the most recent month is just an application of Ken Frenchs approach.
Momentum is a hot topic in academics as there is empirical evidence that this strategy is working but there is a discussion about WHY this strategy is working.
The most recent month is skipped due to the 1-month reversal effect.
If you have any questions please don’t hesitate to drop me a comment.
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0:00 – 01:42 Introduction
01:42 – 03:45 Getting stock tickers from the S&P 500
03:45 – 04:27 Requesting the data
04:27 – 05:17 New year wishes while data download (skippable)
05:17 – 06:39 Necessary data manipulations
06:39 – 07:47 Calculating monthly returns
07:57 – 09:06 Calculating past 11 months returns
09:06 – 16:22 Step by step calculation of a 1-month Momentumprofit
16:22 – 19:22 Wrapping all code into a function to prepare for Backtest
19:22 – 21:42 Backtesting the strategy
21:42 – 27:24 Benchmarking and final thoughts
Momentum Trading Code, Trading strategy and Backtest in Python [Momentum of ALL S&P 500 stocks].
Momentum trading techniques: a beginner’s guide
Momentum trading is a strategy that utilizes the strength of cost motions as a basis for employment opportunity. Discover what Momentum trading is, exactly how it works as well as four preferred momentum-based indications you can make use of to start.
What is Momentum Trading?
Momentum trading is the method of purchasing as well as selling properties according to the current strength of cost trends. It is based on the concept that if there suffices pressure behind a price relocation, it will certainly remain to move in the very same instructions.
When a possession reaches a higher cost, it typically draws in more interest from investors as well as investors, which presses the marketplace cost also greater. This proceeds till a large number of sellers enter the marketplace– for example, when an unforeseen event causes them to reconsider the property’s cost. Once sufficient sellers remain in the marketplace, the Momentum adjustments instructions as well as will certainly compel a possession’s cost lower.
Momentum investors will certainly seek to determine exactly how strong the fad is in a given instructions, after that open a position to benefit from the anticipated cost modification as well as close the setting when the fad starts to lose its strength. The Momentum investor does not necessarily attempt to discover the top as well as bottom of a fad, however rather concentrates on the main body of the cost relocation. They aim to manipulate market belief as well as herding– the tendency for investors to comply with the majority.
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