The Hot Hands are the diversification part of your portfolio. We look at the ETF (Exchange Traded Found) with or without leverage that had the best return in the last month, and we take the one that are not related (we look for diversification). We also take the ones that have more than 1M of volume, so we have liquidity. The principle behind is that an ETF that work well last month may continue his ride.
Once done, we place them in the watchlist and wait for an entry signal in the technique of your choice. As Courtney say, we usually CB or TA. The first that get it entry hit but he prefers CB since we don't look into taking a lot of trade.
Also, you will invest your default % in cash and not in risk. For example, if your default risk is $1000, 1% of 100k account, you will buy for $1000 shares. If the share entry price is $10, you will buy 100 shares of that stock.
Hope it help!