Enhancing Momentum Trading with Macroeconomic Indicators- A Strategic Approach
Journal Title: International Journal of Innovative Research in Computer Science and Technology - Year 2024, Vol 12, Issue 4
Abstract
Traditional momentum trading strategies capitalize on existing market trends but often overlook broader macroeconomic contexts, potentially limiting their effectiveness during periods of economic fluctuation. This paper introduces an enhanced momentum trading strategy that incorporates key economic indicators—GDP, inflation, unemployment rates, and interest rates—to provide a more robust framework capable of adapting to changing economic conditions. By integrating these macroeconomic factors, the strategy aims to improve predictive accuracy and performance stability. Using data from the S&P 600 SmallCap Index, we modified the conventional momentum calculation to include weighted contributions from these indicators, creating a comprehensive 'new momentum' score. Preliminary back testing, comparing this enhanced strategy against traditional methods, shows promising improvements in risk-adjusted returns. This paper not only details the methodology and results of integrating economic indicators into momentum trading but also discusses the implications for risk management and potential areas for future research.
Authors and Affiliations
Mohit Apte
Keywords
Related Articles
- EP ID EP744922
- DOI 10.55524/ijircst.2024.12.4.11
- Views 55
- Downloads 0
Free Recharging Individual Home Appliances Batteries Using Advanced Roof Top Solar Power System in India
India is having best weather system to apply the solar power system to individual home for people’s regular day to day working devices. Sunlight The local weather has a significant impact on photovoltaic systems, with du...
Secure Network Communication Using Vulnerability Assessment Technique
Vulnerability assessment has become an area of interest in distributed network communication which is capable of detecting the penetrations, break-ins and other form of computer abuse. The communication between a team an...
Forecasting the Water Vapour Distribution Over India Using Artificial Neural Networks
Atmospheric water vapour plays an important role in radio communications for both terrestrial and earth space communication systems as well as for global climate change studies. Hence the water vapour data and its inform...
Behaviour of Concrete by Partial Replacement of Coarse Aggregate with Recycled Plastic Granules
In this paper All countries are focusing on sustainable technology that can be economical and adopted for the use of concrete in a better way. Concrete is most widely used construction material and it possess very low te...
Heuristic Walkthrough Usability Evaluation of Electronic Health Record with a Proposed Security Architecture
There currently appears to be concerted efforts at national (HSE) Regional (EU) and international (WHO) level to promote the replacement of paper-based record systems with electronic health record systems (EHR) for impro...