How the AoT Top Pick Strategy Works!

Hi Folks,

Today we're going to look at the very popular AoT Top Pick of the Week strategy! I get many questions each week about how the strategy works and how it can be utilized by traders of all levels and disciplines.

The initial idea behind the Top Pick of the Week strategy was to create a strategy with a focus on a hands off approach. I know that most market enthusiasts and "side hustle" traders do not have the time in their busy professional lives to be watching markets and screens at all times of the day. So the premise behind the Top Pick was to create a strategy with a "one size fits all" style of approach. A strategy that could be scaled with a strong level of repeatability and consistency. While at the same time keeping it very straight forward and "simple"

The strategy consists of a few simple rules:

1. The strategy assumes the opening price is bought on the Monday morning (Or the day that the Top Pick has been selected)

2. The strategy assumes the closing price is sold on the Friday afternoon (Unless otherwise alerted)

3. The strategy assumes that the exact same position size is used each week!

4. Position sizing must be the same each week. A fixed position size must be chosen from the start!

   
   

With this rule set in place I built a strategy. "The Top Pick of the Week!"

How was position size determined?

In the spirit of keeping things as straight forward, simple and as systematic to a degree I knew a fixed position size would be needed for the Top Pick. I looked it at from multiple perspectives but it in the end it comes down to a traders comfort level. Its no secret that the Top Pick can be volatile at times considering its one position for one week. So for the Top Pick I went with a $10k sized fixed position per week with the assumption that the trader had a $100k sized primary trading account and the Top Pick was its own separate entity at 1/10th the size.

Does Top Pick have a max weekly drawdown?

Yes, and with all strategies this has evolved overtime. Now with over 4.5 years of Top Pick of the Week data the max weekly drawdown "sweet spot" sits at a 15% loss. Keep in mind this is based off of position sizing tactics discussed above in the last point!

How do I pick "The Top Pick of the Week?" each week?

My criteria is simple. I generally look for several criteria to base the Top Pick off of.

1. My first criteria is a trending sector. I ask myself what sectors are trending and is momentum strong within these sectors. What is the likelihood that this sector will continue to trend in the coming days or weeks?

   
   

2. The second criteria is the technical setup. Its one thing to have a strong trending sector but are there stocks within this sector that have strong technical characteristics? Bullish flags, higher lows, pennant patterns etc.

   
   

3. The third criteria is the general feel of the market. How are indices performing? is the market volatile? Is the market in a pullback phase? etc.

   
   

4. The fourth criteria is basically criteria 2 and 3 combined. If momentum is muted and markets are volatile: Are there multi day, steep momentum pullback phase stocks available for reversal plays? If so the Top Pick will focus on reversal type plays for those weeks within that criteria.

Has all of the data been tracked since the deployment of the strategy?

Yes, at the end of each week I update my blog with the results of the Top Pick from that week! Obviously Art of Trading private members see the Top Pick for the week on the week but in the public setting the data is updated at the end of the week.

Here is all the Top Pick data since 2022:

• +115.74% in 2022 [Full review]

• +131.86% in 2023 [Full review]

• +37.46% in 2024 [Full review]

• +10.19% in 2025 [Full review]

• +56.70% in 2026 [Full review] * current

Every Top Pick and including the weekly data can be found for each year within each link.

Utilizing the criteria above and following the rulesets with a few bumps in the road along the way the Top Pick has shown its consistency over the past 4.5 year period. With theoretical performance closing in at 352% over the period.

In practice I know of some dedicated AoT members who meticulously tracked their own Top Pick Performance over this time and it fell in line or exceeded with the example account achieved.

What pros and cons have been discovered over time with the strategy?

Pros:

• 1 fixed trade per week

• Fixed position sizing

• Fixed risk parameters

• Concentration on the strongest stocks and sectors

• A "Keep it Simple Stupid" KISS approach

Cons:

• The strategy has gone through periods of drawdowns over multiple weeks

• "unlucky" trades can and will happen

• Max risk can seem excessive if not properly positioned / oversized

• Sometimes Top Picks need to be skipped due to large gaps up

How has the strategy evolved over the past 4.5 years?

When I first created the strategy keeping it as simple and as systematic as possible was the goal. Overtime, simplicity and a systematic approach are still the core focus but with 4.5 years of data strong and weak points within the strategy begin to show themselves.

So what have I learned from that data?

• Gap up opens on the Top Pick exceeding 2% should generally be skipped. Waiting for a gap fill or setting a limit order on the day creates a stronger entry for the week. If the limit order doesn't fill I'll skip the Top Pick entry for that day and either revisit the next day or move on to a secondary idea.

  
  

• The fixed 15% weekly drawdown rule seems excessive but it has proven itself time and time again to be the "sweet spot" I've done tests where I've tightened this up only to be stopped out of perfectly good trades very prematurely.

  
  

• If the Top Pick runs 7% or more quickly to start the week its almost always the best idea to book half of the gain and then carry the second half later into the week. In 2024 and 2025 the "weakness" in the strategy was attributed to not realizing gains quicker even though it didn't fit into the "sell at the end of the week criteria". In 2026 I've been much quicker to realize short term gains and this inturn has produced a much stronger year.

  
  

• No Matter how the Top Pick performs on the week, even if the technical setup still remains "strong" it has almost never been beneficial for the Top Pick to be held into the second week. I've found that selling it and moving on to a new idea in the next week is the much stronger play! 2024 and 2025 "weakness" could be attributed to holding the Top Pick for more then one week. This is why its strictly a rule to sell at the end of the week no matter what now.

  
  

• The Top Pick has proven to be a marathon type strategy. Where one bad month or even a string of several bad trades tend to work themselves out over time. As long as position size remains constant and the general rules in the "Top Pick" criteria have been followed it has tended to have strong bounce back phases after extended lulls in the strategy.

What are the next steps for the Top Pick for 2026?

My plan is to continue to be quick to realize short term strength and be nimble in the approach on the pick. If some weeks need to be skipped, ohh well. The Top Pick being a core focus for the AoT Private Community requires consistency and discipline within the strategy on my behalf and obviously I plan to keep it that way!

Alright, well thanks for reading another AoT blog post! I'm excited to be able to share these strategy updates with the community and all of those who follow along on X and here on this blog! I hope some of these ideas and techniques can be utilized within your own trading strategies and for those who wanted more insight on the Top Pick its here for that too!

Cheers and happy trading!