Trading Strategy
Dividend Trading Strategy with MA200 Filter
Jun
Dividend Trading Strategy with MA200 Filter
Category: Trading Strategies | Quantina Intelligence Ltd.
✨ What is Dividend Trading?
Dividend trading means investing in shares of companies that regularly pay out part of their profits to shareholders as dividends. It’s a popular way to:
- Generate consistent income (typically 1–5% annually)
- Hold long-term positions in reliable companies
- Benefit from both price growth and dividend payments
- Reinvest dividends to build compounding returns
Why Add a 200-Day Moving Average (MA200)?
To reduce risk and avoid falling stocks, we add a technical filter using the 200-day Moving Average (MA200). This ensures we only invest when the stock is in a long-term uptrend.
- Buy only when price is above a rising MA200
- Avoid or exit when price drops below MA200
£1,000 Dividend Trading Example
| Step | Action |
|---|---|
| 1 | Start with £1,000 capital |
| 2 | Screen stocks with dividend yield over 2% |
| 3 | Check that the stock price is above its 200 MA |
| 4 | Invest in 2–3 diversified stocks (e.g., utilities, telecoms) |
| 5 | Collect quarterly dividends (~£15–£30/year) |
| 6 | Reinvest dividends during price dips near MA200 |
| 7 | Re-evaluate yearly: adjust based on trends and payouts |
✅ Strategy Summary
- Income + Growth: Dividends plus capital appreciation
- 200 MA Filter: Keeps you on the right side of the trend
- Reinvestment: Boosts returns through compounding
️ Python Code Snippet (Backtest Template)
import pandas as pd
data['MA200'] = data['close'].rolling(200).mean()
data['Dividend_Yield'] = data['annual_dividend'] / data['close']
# Entry condition: dividend yield > 2% and price above MA200
data['Buy_Signal'] = (data['close'] > data['MA200']) & (data['Dividend_Yield'] > 0.02)
# Simulate investment logic here
Final Thoughts
Dividend trading can be a reliable, low-stress way to grow your capital while generating income — especially when enhanced with smart filters like the 200 MA. Use this strategy to build a strong portfolio of dividend stocks, reinvest wisely, and time your entries with technical confidence.
Alternative Option: Quantina Debenture
If you prefer a simpler, fixed-income approach, you can also invest conveniently in the
Quantina Debenture —
offering an 8% fixed income annually.
Interest is paid monthly starting from the second year, and minimum investment starts from just £1,000.
It’s a secure, predictable option to complement your dividend stock holdings.
Need help choosing dividend stocks or want access to exclusive income strategies? Contact Quantina today.
