There is a popular stock recommendations service Montley Fool. You may have seen their articles in the news - they are all over the place. One of the lists they offer is called "Rule Breakers". Described as:
Stocks Selection
Not that bad for 5 month?
"Rule Breakers" buy&hold performance for the same period: 6.39% (buying each stock worth of $833. 10K / 12 ~ 833)
Returns vs. buy and hold benchmark - $SPY^
Tickers traded ^
Disclaimer: all calculations made using BreakingEquity
I have been following those a while and always had an idea to turn that into a day trading strategy. So here we go I tested the following thesis: these stocks are popular growth stocks with a strong market interest behind them which should result in a lot of participants buying the dip.
Stocks Selection
- All "Rule Breakers" buy recommendations made in H1 2021 (from 2021-01-14 to 2021-06-24)
- 12 tickers total: NET, DDOG, SNOW, TTD, CPNG, PLNT, GDRX, TDOC, SNBR, AXON, MRNA, W
- I'm trading from 2021-07-01 to 2021-11-30 (to avoid look ahead bias)
- Enter Criteria (condition to open a position)
- Only enter in the first half of the day
- Wait for 9:40 (market is open for 10min)
- Stock price dropped more than 1% from the open price of the day
- There is a sign of recovery (EMA 8 is going up on a 3min chart)
- If there are multiple candidates - buy the one with highest relative volume within 10min
- Exit Criteria (condition to close a position)
- 1% profit or a trailing stop loss 0.25%
- alway exit EOD
- Initial capital $10,000
- Gain is reinvested the next day
- Loss reducing the buying power the next day
Not that bad for 5 month?
"Rule Breakers" buy&hold performance for the same period: 6.39% (buying each stock worth of $833. 10K / 12 ~ 833)
Returns vs. buy and hold benchmark - $SPY^
Tickers traded ^
Disclaimer: all calculations made using BreakingEquity
