TradeRounds Investment Models: Quantitative Momentum & Risk Management Strategies
At TradeRounds, we specialize in systematic, quantitative trading strategies designed to capture market upside while strictly managing downside volatility. Our proprietary models utilize a data-driven
How to Read Our Signals
Our system uses binary signaling to keep trading decisions simple and clear. We do not issue separate “Buy” or “Sell” alerts; instead, we tell you exactly where your capital should be positioned for the coming month.
Signal: “HOLD”
What it means: The asset is demonstrating positive momentum and is a “Risk On” position.
Action: If you do not own this asset, BUY it. If you already own it, continue to keep it in your portfolio.
Signal: “RISK OFF”
What it means: The asset’s trend has broken or fallen below our safety benchmark.
Action: If you own the risk asset, SELL it and move the capital to the designated defensive/safety ETF (or cash). If you are already in the defensive position, stay there.
Our Core Methodology: The Weighted Momentum Filter
The foundation of every TradeRounds strategy is our Weighted Momentum Measurement. Rather than relying on a single timeframe, we calculate a composite momentum score based on performance over 1, 3, 6, and 12-month periods. This multi-timeframe analysis smooths out short-term market noise to identify robust, prevailing trends.
The “Risk Off” Safety Switch Crucially, our models do not simply chase performance. We constantly compare the momentum of potential investments against a benchmark Bond Holding Asset.
Risk On: If an asset’s momentum score exceeds the safety benchmark, the model generates a “HOLD” signal.
Risk Off: If the asset’s momentum falls below the benchmark, the model generates a “RISK OFF” signal, dictating a move to safety to preserve capital.
Signal Timing All TradeRounds signals are published on the 1st of every month. While we recommend executing trades promptly, our strategies are designed to be robust; investors can typically expect similar performance even with a short lag in trade execution.
1. TradeRounds Risk Management Portfolio
Strategy Type: Multi-Asset Tactical Asset Allocation (Global Macro)
This is our flagship broad-market strategy. It is designed to navigate changing economic cycles by rotating into asset classes showing the strongest relative strength.
How It Works: When the model detects a healthy market, it issues a HOLD signal for one of several specific offensive ETFs. When trends break down, it issues a RISK OFF signal, indicating a reallocation to a low-volatility, interest-bearing ETF.
Investment Universe (Offensive & Defensive):
SPY: SPDR S&P 500 ETF Trust (U.S. Large Cap Stocks)
VEA: Vanguard FTSE Developed Markets ETF (International Developed Stocks)
VNQ: Vanguard Real Estate ETF (Real Estate Investment Trusts/REITs)
DBC: Invesco DB Commodity Index Tracking Fund (Commodities: Energy, Metals, Agriculture)
GLD: SPDR Gold Shares (Physical Gold Bullion)
HYG: iShares iBoxx $ High Yield Corporate Bond ETF (High Yield/Junk Bonds)
TLT: iShares 20+ Year Treasury Bond ETF (Long-Term U.S. Treasuries)
AGG: iShares Core U.S. Aggregate Bond ETF (Total U.S. Bond Market)
IEF: iShares 7-10 Year Treasury Bond ETF (Intermediate-Term U.S. Treasuries)
SHY: iShares 1-3 Year Treasury Bond ETF (Short-Term U.S. Treasuries/Cash Proxy)
TIP: iShares TIPS Bond ETF (Treasury Inflation-Protected Securities)
2. Technology Stock Risk Management Portfolio
Strategy Type: Individual Stock Trend Following
This portfolio applies our rigorous momentum framework to high-growth, mega-cap technology companies. Unlike an ETF, this model evaluates the momentum of each stock separately against our risk-off asset.
The “Magnificent” Watchlist: We actively monitor and generate signals for the following market leaders:
GOOG: Alphabet Inc. (Google)
AAPL: Apple Inc.
TSLA: Tesla, Inc.
MU: Micron Technology, Inc.
BABA: Alibaba Group Holding Limited
META: Meta Platforms, Inc. (Facebook)
NFLX: Netflix, Inc.
NVDA: NVIDIA Corporation
The Decision Process: Each month, every stock is individually tested. If NVIDIA (NVDA) is strong but Tesla (TSLA) is weak relative to our safety bond benchmark, the model will signal HOLD for NVDA and RISK OFF for the capital allocated to TSLA.
3. Sector ETF Risk Management Portfolio
Strategy Type: Sector Rotation & Momentum
Market leadership rotates constantly. Energy stocks may lead one year, while Technology or Healthcare leads the next. This strategy ensures you are exposed to the strongest corners of the U.S. economy.
How It Works:
Ranking: We rank primary U.S. market sectors by their weighted momentum scores.
Selection: We issue HOLD signals for the ETFs representing the Top 4 highest-ranked sectors.
Safety Valve: If the top sectors display downward volatility or fail to beat the safety benchmark, the model issues a RISK OFF signal, moving partially or completely to safety.
4. U.S. Market Cap ETF Strategy
Strategy Type: Size Factor Rotation (Small vs. Mid vs. Large)
Historically, market capitalization leadership shifts based on economic conditions. Small-cap stocks often lead in risk-seeking environments, while large-cap stocks often dominate during flights to quality.
How It Works: We analyze the relative performance of Small-Cap, Mid-Cap, and Large-Cap ETFs. The model issues a HOLD signal for the specific market capitalization tier demonstrating the strongest relative strength. If all three tiers are underperforming, the strategy signals RISK OFF to low-risk instruments.
5. Bitcoin Risk Management Strategy
Strategy Type: Crypto Trend Following
This strategy is designed for investors who want exposure to the high-growth potential of Bitcoin but wish to mitigate the catastrophic drawdowns often associated with “Crypto Winters.”
How It Works: The goal is to achieve long-term performance comparable to a “Buy and Hold” strategy of the Grayscale Bitcoin Trust (GBTC), but with significantly reduced volatility.
Important Risk Note: While this model aims to smooth out long-term volatility by signaling RISK OFF during major downtrends, intramonth volatility can still be substantial. Since our signals are updated on the 1st of the month, the strategy remains exposed to the natural price swings of Bitcoin during the weeks between rebalancing dates.