11 replies to this topic

[CLK]

 

Hey CLK, but doesn't the effectiveness of a buy and hold strategy on a 3x etf depend on the underlying instrument volatility ?

For example the max draw down on the qqq from 2009 to 2019 in qqq was maybe 20 to 25%

But if we were to try the same but and hold on USLV for example the max draw down on silver price if it goes from 15 to 100 might be much larger . Maybe a 50% mini bear on the way to 100 to 150

If you were going to buy and hold uslv for 5 to 10 years how would you manage it

 

 

If you want leverage you have to be willing to accept the volatility. How do you manage? You don't, you buy more. This is not an all in at one price and all money is used up. You need to be able to buy the corrections to take advantage of cheap prices. With buy and hold you have to accept the drawdowns, bear markets only last 2-3 years, bull markets usually are 20 years. Forget how much you are losing and focus on buying more.

 

 

 

If you won't have more cash, then go long 2/3 in 3X funds and keep the 1/3 in cash for bear market lows, you will still be ahead

of SPY if it doesn't drop. 

[diogenes227]

 

Buy and hold? Buy and hold? What's with that? Isn't this place called "Traders-talk"?

 

Trading-wise, these leveraged ETFs as just fine.  On my current swing signal, both TQQQ and UPRO are up 3.6%, TNA up 6.7%. In the sectors, FAS is up 7,5%, LABU 12%. We're talking four trading days here.

 

 

 

"On your current swing"  As if you get in perfect every time with no wrong moves and no stop outs, that's the advantage with buy and hold, you don't have a max drawdown or stop, you buy and you buy more on dips and keep buying, you don't try to time the market, but anybody can see a 30% drop is likely a good spot to be buying heavy.

 

 

I see so many unethical portrayals of profitability all over the trading boards, very few post entries, and of those few that do almost none provide stops, and these are trades so you know there is an exit if wrong in mind if not hard stop, but they don't publish those. So out of nowhere people that gave no trade all of a sudden are closing something out for huge profits, really, really?? You have no idea if the trade was real and if it was you certainly will not be made aware of the other attempts that ended in losses, nooo, they couldn't think of admitting a loss now could they, would tarnish their facade of a reputation.

 

 

Obviously you don't believe a word I write or else you are so frustrated with your own trading you close your mind and can't see straight.

 

Of course every trading system has drawdowns. That is a given in trading. Little winners, little losers. Can't do anything about those. And then there are big winners and big losers. A trader has to figure out a way to eliminate the big loser to get the big winners, which is why anyone would swing or day trade. Long term holders, when the bear comes and rips off 20% to 50% of the gain, it'll take a few years to get back to beakeven.

 

By the way, on one of the three end-of-day swing systems I have, I am being forced to sell TQQQ on today's open.

Edited by diogenes227, 03 July 2019 - 08:29 AM.