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Triple leveraged drawdown selling rule
#11
THINKORSWIM
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#12
(04-01-2021, 05:24 AM)vbin Wrote: You can also look at MA( moving averages) rather than simply exiting below 10% from previous low. When a stocks breaks a 50MA usually it's a bulish or bearish(depending on the direction) sign. A lot of traders take 200MA very seriously.

I will read up on moving averages, but do note that my rule is not as simply stated as "10% from previous low".  You line up 2 or more previous lows and plot a course. It likely works out to about the same figure as the moving average does, but with perhaps more precision because rather than just taking 50 days or 200 days it identifies a trend line and gets you out when the trend breaks.
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#13
(04-01-2021, 07:14 AM)ken-do-nim Wrote:
(04-01-2021, 05:24 AM)vbin Wrote: You can also look at MA( moving averages) rather than simply exiting below 10% from previous low. When a stocks breaks a 50MA usually it's a bulish or bearish(depending on the direction) sign. A lot of traders take 200MA very seriously.

I will read up on moving averages, but do note that my rule is not as simply stated as "10% from previous low".  You line up 2 or more previous lows and plot a course.  It likely works out to about the same figure as the moving average does, but with perhaps more precision because rather than just taking 50 days or 200 days it identifies a trend line and gets you out when the trend breaks.
I absolutely do use RSI to determine (especially on my entry) how aggressive I am inclined to be.  For now, I agree with VBIN thta MA might be what you should use.  It's easy to check on a daily basis, because you'll have a good idea days in advance (usually) that you are approaching a trigger point.  I am not a big believer in getting too deep in technical analysis, but M.A. does work.  A.I. trading triggers off it.  Casual traders use it.  CNBC talking heads beat it in the ground daily.  It becomes a self fulfilling prophecy. The 200 DMA is where I would start. The 50 DMA will whipsaw you too often. 10% is just a number.        

I am glad you have other 3X ETFs that trade inversely.  Silly analogy but when you trade substantial amounts of leverage it potentially a gunfight on any given day.  There will definitely be shootouts.  Some of the gunslingers have to be on your side every day.  I got my hard lesson during the tech bubble.  90% of my holdings were in tech and a bit of margin.  I told myself I would just hold through it.  I did just that and it didn't work out.

And nothing says you have to go completely in or out as you mentioned. You can gradually sell into a rally (with a set % if you like). You can also get back in the same way. i.e. 25% until you determine it's not a fake out and headed back down two days later. You can add more into strength. Your rules do need to be fairly simple, and pre-determined. I know you get that part.
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#14
Given that my ROTH IRA (~72k) is 100% triple leveraged, I am seriously considering a policy that when I go on a real vacation (post-covid!!), I put it all into cash for the week or so that I'm away. That way I don't have to worry about checking the market in case there's a sudden massive drawdown while I'm relaxing on the beach.
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#15
(04-02-2021, 08:39 AM)ken-do-nim Wrote: Given that my ROTH IRA (~72k) is 100% triple leveraged, I am seriously considering a policy that when I go on a real vacation (post-covid!!), I put it all into cash for the week or so that I'm away.  That way I don't have to worry about checking the market in case there's a sudden massive drawdown while I'm relaxing on the beach.
That will work until the leveraged port runs 10% while you are out.  Then what upon your return, buy high and chase?  You aren't risk averse so as an alternative maybe find a non-leveraged growth fund you like and park some cash there.  If the market pops you'll make a gain, and if it doesn't you don't have to worry about coming home 25% down.  The leveraged funds will be down harder  in that case and you can make a decision.  If the market crashed that hard you'd hear about it anyway.  Going completely in and out of cash rarely works out for me.       

I have to simplify my port for the summer this month.  I don't need options expiring every Friday when I have things that need done around the house.
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#16
(04-02-2021, 10:28 PM)fenders53 Wrote:
(04-02-2021, 08:39 AM)ken-do-nim Wrote: Given that my ROTH IRA (~72k) is 100% triple leveraged, I am seriously considering a policy that when I go on a real vacation (post-covid!!), I put it all into cash for the week or so that I'm away.  That way I don't have to worry about checking the market in case there's a sudden massive drawdown while I'm relaxing on the beach.
That will work until the leveraged port runs 10% while you are out.  Then what upon your return, buy high and chase?  You aren't risk averse so as an alternative maybe find a non-leveraged growth fund you like and park some cash there.  If the market pops you'll make a gain, and if it doesn't you don't have to worry about coming home 25% down.  The leveraged funds will be down harder  in that case and you can make a decision.  If the market crashed that hard you'd hear about it anyway.  Going completely in and out of cash rarely works out for me.       

I have to simplify my port for the summer this month.  I don't need options expiring every Friday when I have things that need done around the house.

That makes tons of sense!  Drop down to SOXX, QQQ and/or VOO for the vacation.  Thanks Smile
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#17
My 2 cents in the Moving Average method. Technical analysis is not magic but the MAs represent common sense IMO. 50 day is so popular because it represents the price for the past year, do you want to be long under that price level? Not me.

If people would consider what things represent it would make much more sense to them.

Similar to an opening price (ANY opening price-day-week-month-year) on the timeframe which you are trading. You will NOT find me long ES, below that opening which I am referencing from. Doesn't make sense to me to think that I know where the turn will come (although on ES I do have a good idea) I would rathe be long when price IS going up and short when price IS going down.

Good luck to all and Happy Easter to those whom it applies.
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#18
(04-03-2021, 09:10 AM)NilesMike Wrote: My 2 cents in the Moving Average method. Technical analysis is not magic but the MAs represent common sense IMO. 50 day is so popular because it represents the price for the past year, do you want to be long under that price level? Not me.

If people would consider what things represent it would make much more sense to them.

Similar to an opening price (ANY opening price-day-week-month-year) on the timeframe which you are trading. You will NOT find me long ES, below that opening which I am referencing from. Doesn't make sense to me to think that I know where the turn will come (although on ES I do have a good idea) I would rathe be long when price IS going up and short when price IS going down.

Good luck to all and Happy Easter to those whom it applies.
Happy Easter to you as well. 

The MAs do represent common sense.  A lot of the other technical indicators seem more random to me.  Other than a significant change in a stocks fundamentals or an earning report, I don't think anything is a more important trigger than a stock crossing a major MA.  I've watched some of my stocks do a years long battle with support or resistance at the 200DMA.  The 50DMA seems much more significant for the trading strategies being discussed here.  With triple leverage it would seem a lot of money could be lost between the 50 and the 200.
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#19
I do respect your ideas about the moving averages, but I currently believe my graphical statistical analysis will yield more accurate results. We'll just have to see. I spent the morning going through most of the Direxion triple offerings, plus a pair from Upro. I didn't descend into the doubles, the internationals, or the treasury ones. Note that "on run since" doesn't necessarily denote a bottom; some of them ramped up their upward trends then.

And yes, happy Easter & Passover!

[Image: 1e92e73d-5dab-4d96-bb12-89439f815009.png]
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#20
Any method that trims some on runs and doesn't ride a triple leverage into the dirt has a chance IMO. The only thing I am certain of is buy and hold leverage forever through thick and thin is a losing strategy, even if the underlying survives. I say that because a fair amount of those leveraged funds cease to exist eventually. Humor us and watch the MAs for a couple of the unleveraged version of your funds. Maybe QQQ and SOXX? A big eventual dip and the option cost of churning sideways for a few years takes them out. QQQ is the one to study historicals on using any method. It will always be more volatile than SPY because tech is going to represent growth the rest of our lives.
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