Momentum (or trend-following) trading does the opposite of mean reversion: it buys strength, betting that what's already going up keeps going up. Ice Juice Trading's Trend Rider template automates it on your own Alpaca account — it buys fresh highs inside a confirmed uptrend and rides them with a trailing stop. You set the risk limits; it runs on paper first. No code.
A momentum strategy assumes trends persist: instead of trying to buy the bottom, it buys as a stock makes new highs and stays with the move until it breaks. The trade-off is well known — momentum strategies typically win less than half the time but aim to make it back with a few large, long-held winners, while cutting losers quickly. That "let winners run, cut losers fast" shape is why a trailing stop is central to how the Trend Rider exits.
Enter when the price makes a new 20-day high and is above its 200-day moving average.
Exit with a trailing stop that follows the trend up and takes you out when it reverses.
The 20-day high is the momentum trigger; the 200-day filter keeps you buying breakouts in names that are already in a longer uptrend, not bouncing in a downtrend. Every knob is yours: dollars per position, the trailing-stop and stop-loss %, maximum open positions — or point the same rule at your own basket of tickers.
Trend-following shines in strong, sustained bull moves, where a handful of trades ride most of the advance. It suffers in choppy, range-bound markets, where breakouts fail and the trailing stop gets nicked repeatedly for small losses ("whipsaw"). A sub-50% win rate is normal and by design — the math works only if the winners are meaningfully bigger than the losers, so position sizing and letting winners run matter more than being right often.
The honest way to judge a momentum rule is to test it on the names you actually trade. Ice Juice Trading's built-in backtester runs the Trend Rider over history and reports win rate, profit factor, and trade count. Backtested results are hypothetical and past performance does not guarantee future results — so the next step is always paper trading the strategy live on simulated money in your own account before you commit real capital.
Automate momentum on your Alpaca account →
Prefer to fade weakness instead of buy strength? See the Dip Buyer (mean reversion), or explore all seven built-in strategies — including the Golden Cross, MACD Cross, and Breakout 55. Compare plans and pricing (free paper trading included).