Book a call
Momentum investing

Momentum investing explained: the research behind Strike Algo

Momentum investing means owning the stocks that have been rising most strongly, on the evidence that recent winners tend to keep outperforming for a while. It is one of the most studied effects in finance.

Book a callSee every result
Definition

What is momentum investing?

Momentum investing is a rules-based approach that ranks stocks by their recent performance and holds the strongest ones, rotating as leadership changes. Cross-sectional momentum compares stocks against each other at the same point in time; Strike Algo uses cross-sectional momentum across about 450 liquid U.S. stocks.

Research

The academic evidence

Winners keep winning

Stocks that performed best over the previous months tended to keep outperforming the worst performers over the following months.

Jegadeesh & Titman, "Returns to Buying Winners and Selling Losers," Journal of Finance (1993)

Highs predict more highs

How close a stock trades to its 52-week high explains a large share of momentum profits.

George & Hwang, Journal of Finance (2004)

It shows up everywhere

Trend persistence appears across asset classes and long time periods.

Moskowitz, Ooi & Pedersen, Journal of Financial Economics (2012)
Who uses it

Momentum at institutional scale

The largest asset manager in the world, BlackRock, runs about $20 billion in its iShares MSCI USA Momentum Factor ETF (MTUM), which holds about 125 stocks. Systematic, rules-based trading is also standard at firms like Bridgewater and Citadel, for the same reason: rules remove emotion. See how Strike compares with MTUM.

Risks

The risks of momentum investing

  • It is concentrated. Holding the top 20 names means bigger swings than a broad index.
  • It pays in bursts. Strike's 2021 was flat while the market gained 27%.
  • It can fall fast. The deepest drawdown on Strike's record was 37%, and July 2026 was -22.1%.
  • The people who do well stay through the flat stretches. Most losses in momentum come from quitting at the wrong time.
Strike's version

How Strike Algo applies momentum

450

Ranked every day

About 450 of the most liquid U.S. stocks, scored on one scale from strongest to weakest.

20

Held at a time

Strike owns only the top 20, where the momentum effect is concentrated.

1×

Rotated monthly

Once a month it rotates out of what stopped leading and into what leads now.

Never holds client moneyNo crypto, currencies or offshore assetsLong-only, no shortingEvery trade visible in your own account

The full rules →

● Results from our community

92 results. 34 video stories.

Scroll the whole wallBook a call
Member post, Jun 1, 2026. Up 67.85% in six months on $100K, against 14.23% for the S&P and 27.68% for QQQ.Year-to-date return of 26.26% against the S&P 500.Member post, Jun 11, 2026. Momentum orders filled in Interactive Brokers.A 20-name book with unrealized gains by position.Member post, Apr 15, 2026. Live since Oct 1, 2025, alongside a buy-and-hold account. "Momentum is much more volatile."What made up May's 17.5%, by position.Member post, Jun 10, 2026. Orders executed through the momentum strategy.Interactive Brokers account, up 13.39% year to date.Account up 55.98% year to date.Interactive Brokers book, up 2.42% on the day.The investor Robert first learned momentum from. All accounts at $14.07M. He runs his own momentum strategy, not Strike.Capital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultMember post, Jun 1, 2026. Up 67.85% in six months on $100K, against 14.23% for the S&P and 27.68% for QQQ.Year-to-date return of 26.26% against the S&P 500.Member post, Jun 11, 2026. Momentum orders filled in Interactive Brokers.A 20-name book with unrealized gains by position.Member post, Apr 15, 2026. Live since Oct 1, 2025, alongside a buy-and-hold account. "Momentum is much more volatile."What made up May's 17.5%, by position.Member post, Jun 10, 2026. Orders executed through the momentum strategy.Interactive Brokers account, up 13.39% year to date.Account up 55.98% year to date.Interactive Brokers book, up 2.42% on the day.The investor Robert first learned momentum from. All accounts at $14.07M. He runs his own momentum strategy, not Strike.Capital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community result
+14.59% total return in the past week.+15.86% total return this month.+13.43% total return in the past month.+11.10% total return in the past week.$9,777 unrealized P&L.$14,257 unrealized P&L.$16,263 unrealized P&L.Interactive Brokers account, up 11.13% year to date.A 20% move in five days, from $7.86M to $9.42M.All accounts, up 1.15% on the day.Capital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community result+14.59% total return in the past week.+15.86% total return this month.+13.43% total return in the past month.+11.10% total return in the past week.$9,777 unrealized P&L.$14,257 unrealized P&L.$16,263 unrealized P&L.Interactive Brokers account, up 11.13% year to date.A 20% move in five days, from $7.86M to $9.42M.All accounts, up 1.15% on the day.Capital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community resultCapital B28 community result

Capital B28 community across all programs, including trading education. Not Strike results unless stated. Not typical; individual results vary.

Keep researchingHow it works →Strike Algo ranks about 450 liquid U.S. stocks daily, holds the strongest 20 and rotates monthly in your own Interactive…Keep researchingStrike vs. MTUM →Strike Algo vs. the iShares MSCI USA Momentum Factor ETF (MTUM): holdings, approach and $100,000 over the same months, A…Keep researchingTrack record →The full Strike Algo model record from April 2020 to October 2026: annual and monthly returns vs the S&P 500, the worst …

Stop guessing.
Put a system on it.

Your money stays in your account. The system does the work. You get your evenings back.

Book a callSee how setup works

858-227-6740

⚡Book a call