Dual Momentum Trading Strategies

Learn three dual momentum trading strategies for assets like S&P 500, bonds, and gold. Discover rules, settings, and historical performance insights for monthly

Published · Updated · Methodology: Technical Indicators

Part of: Momentum Trading

  • Methodology: Technical Indicators
  • Content type: strategy
  • Timeframes: Monthly (end of month), 3-month look back period, 12-month look back period
  • Markets: S&P 500 (SPY), Long-term Treasury bonds (TLT, AGG), Gold (GLD), US stocks (SPY), Foreign stocks (EFA)

Source video

Decoded from: 3 Dual Momentum Trading Strategies by Quantified Strategies — watch the original

Key timestamps:

  • 0:43 - 3 Dual Momentum Trading Strategies
  • 1:30 - Strategy 1: SP 500 and long-term Treasury bonds rules
  • 3:18 - Strategy 2: SP 500 and gold rules
  • 4:30 - Strategy 3: Gary Antonacci's dual momentum rules
  • 5:18 - FAQ Dual Momentum Trading Strategies

Strategy overview

Dual momentum layers two questions on top of each other: relative momentum asks which of two assets has been stronger, and absolute momentum asks whether that winner is strong enough in its own right to be worth holding at all. What makes this entry unusual among momentum material is the clock it runs on — decisions are made at the end of the month, not on a chart in real time, which puts it closer to a rules-based allocation switch than to anything resembling a trade setup.

The source video, "3 Dual Momentum Trading Strategies" from Quantified Strategies, presents three versions of the same machine with different opponents: the S&P 500 paired against long-term Treasury bonds, the S&P 500 paired against gold, and Gary Antonacci's original formulation — Antonacci is the writer who popularized the term and the two-layer structure. Read across the three, the interesting variable is not the equity leg, which is constant, but the defensive one: where the model parks capital when stocks fail the absolute test is what actually separates these variants, and it is a bet on which asset behaves well when equities do not.

The other design surface is the lookback window — the video works with both a short and a long ranking horizon, and that choice governs how quickly the switch reacts and how often it whipsaws between assets. It is worth being clear about the trade-off inherent in monthly rebalancing: a decade of history is roughly a hundred and twenty decisions, so any performance figure rests on far fewer independent observations than an intraday method would produce over the same span. No decoded rule set exists for this entry, so this page points to the concept and the source video rather than a full extracted breakdown; the video's timestamps mark where each of the three variants is described.

Topics

dual momentum strategy · trading strategy · momentum trading · asset allocation strategy · monthly trading strategy · s&p 500 strategy · bonds trading strategy · gold trading strategy · us stocks strategy · foreign stocks strategy · sector rotation strategy · strategy decoder · pine script

Frequently asked questions

What is a dual momentum strategy?

Dual momentum combines two filters. Relative momentum compares assets against each other to pick the stronger one; absolute momentum then checks whether that asset is trending up on its own terms, and moves to a defensive position if it is not. An asset must pass both tests to be held.

How is dual momentum different from momentum trading on a chart?

Timeframe and purpose. Chart-based momentum usually times entries and exits within a trend on intraday or daily bars. Dual momentum, as presented here, is an allocation rule evaluated at the end of each month that decides which single asset to hold — it produces a handful of switches per year, not a stream of trades.

Why do the three versions in the video use different second assets?

Because the defensive leg is the real design decision. The equity side stays the same across all three; pairing it with long-term Treasuries, with gold, or with the asset Antonacci's version uses reflects different assumptions about what holds up when equities weaken. Those assumptions behave very differently across interest-rate and inflation regimes.

Does the lookback period matter?

It is one of the main levers. A shorter ranking window makes the switch more responsive but increases the chance of flipping on noise; a longer one is steadier but slower to leave a deteriorating asset. Because monthly rebalancing yields relatively few decisions over any test period, results can be sensitive to that setting — which is a reason to test a range rather than trust a single number.

About this strategy page

This trading strategy was decoded by Strategy Decoder's AI from a public YouTube trading video and turned into a structured, reviewable specification. In the interactive app this page shows the full entry and exit logic, risk management settings, the indicators involved with their parameters, AlgoWizard-compatible logic and a Pine Script export ready for TradingView backtesting — plus an automated backtest verdict when one has been computed for this strategy.

Strategy Decoder catalogs 2,229 decoded strategies. Each one is extracted with confidence scoring, cross-linked to the indicators it uses, and kept up to date as new videos are processed daily. Load this page with JavaScript enabled to use the interactive tools, or start from the strategy explorer to filter by methodology, market and timeframe.

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