I have a pretty good grasp on mean reversion type trading.  It's the cornerstone of most of my trading systems and typically what I use real money to trade with.  One thing I've never gotten the handle of is momentum trading.  My take is that mean reversion is great for vascillating markets.  Momentum trading is great in trending markets, particularly those trending up.  I've come up with some ideas over the last several weeks that I'd like to try.  I'd tell you more about them, but this is really throwing stuff on the wall to see what sticks.  I'll be refining this technique over the next several months, or I'll be throwing it away and going back to the drawing board.

To me, the key to momentum investing is trying not to get slaughtered during down trends.  I'm purposely starting right now (even though it's a little premature in my studies) because of the wild market conditions.  You'll be able to monitor my progress at Marketocracy and right now this is only paper money.  The MMF fund will start today with a NAV of $10.00 per share or $1,000,000 in cash.  No pretty pictures or graphs yet, however, the first buys will start today.  The two I'm starting the fund with are ZEUS and AXYS.

What's going to make this fund different for me is that there is going to be some discretion regarding which items I buy and sell and when I buy and sell them.  Typically in the past, I would generate a culled list from a series of fundamental and technical criteria and blindly buy and sell at periods defined in my plan.  This time, I'll rely on the noodle just a little bit to try and keep the fund out of danger.  Hopefully most of the screening and analysis will keep me out of serious danger.

Depending on the level of interest, I may keep the trade log public and rationale behind each buy and sell.