How Two Simple Rules Turned a 682% Strategy Into a 917% Winner

Adding VIX and 200 EMA filters improved returns AND reduced risk

Most momentum strategies fail because they don’t know when to step aside.

I learned this the hard way.

I built a simple rotation strategy. It switches between micro-cap stocks and large-cap stocks based on which one is doing better. Every week, I check the last 21 days of returns. I put all my money in the winner.

Simple, right?

Over 27 years, it returned 682%. Not bad. But the drawdown was brutal. At one point, a $100,000 account dropped to $35,400. That’s a 64.6% loss from the peak.

Most people would have quit.

So I asked: Can I keep the gains but cut the pain?

The answer was yes. With two simple rules.