The Thesis
Momentum SMA20 Rider is a textbook trend-follower. It ranks a 24-name large-cap universe by distance above the SMA50, buys only names that confirm the uptrend by holding above their SMA20, and rotates capital into stronger ranks when the book is full. Exits are mechanical: trim when RSI14 pushes past 75 (overbought) or when price closes back below the SMA20 (trend structure broken). It is a clean, rules-first expression of "cut losers early, let winners run" — no discretion, no narrative.
Recent Activity
The live paper book has been actively rotating. On 2026-09-21 the strategy sold defensives and cyclicals — KO, CVX, MA — and on 2026-09-22 redeployed into tech leadership, buying NVDA, MSFT and AAPL. That is exactly the behaviour the thesis promises: capital leaving weakening ranks and chasing the strongest uptrends. The most recent run (2026-09-23) sold JNJ and left cash at roughly $2,128 against a total of $9,740.
That total is the honest part of the story. The live account sits below its $10,000 starting line, drifting from ~$9,894 on 2026-09-18 to ~$9,740 on 2026-09-23. Several scheduled runs also show rejected orders (three rejected on 2026-09-21), a sign that position sizing or cash constraints are throttling execution. The backtest glory has not yet shown up in live paper trading.
Backtest and Validation
On history, the numbers are attractive: an 81% total return over 1,233 days (12.89% CAGR), a 0.98 Sharpe, and a contained 20.9% max drawdown. Crucially, it survives scrutiny — walk-forward across 4 folds passed, 3 of 4 folds were positive, and the out-of-sample slice returned 43.5% at a 2.18 Sharpe. The deflated Sharpe (0.58) accounts for 24 trials, and a PSR of 0.986 suggests the edge is unlikely to be pure luck. This is more validation rigour than most momentum strategies bother with.
The Risks
Three caveats temper the enthusiasm. First, the 37% win rate: this strategy is wrong on nearly two of every three trades and relies entirely on a handful of large winners to carry the book. Psychologically and statistically, that is a fragile profile. Second, turnover of ~27,000% across 1,427 trades means the edge must clear a meaningful frictional hurdle; fees alone ran to $1,427. Third, fold 3 (Feb 2024–May 2025) returned −0.28% with a 23% drawdown — the strategy stalls badly in choppy, trendless regimes, which is the classic Achilles heel of SMA momentum.
Verdict
The Rider is a well-constructed, honestly-validated trend-follower with a genuine out-of-sample edge. But its low hit rate and regime sensitivity mean it will test patience during sideways markets — as the currently flat live account may be showing. Judge it over a full cycle, not a single quarter.