ETF SWING & DAY TRADING

[jimapplesmith]

As far as I can tell, it is exactly 2X the size of the 1X B&H drawdown.

On the 2X trade, do you hold the same number of shares until the signal to sell the long or short, which may be several days after the initial long or short signal?

This might not be the right intentional thing to do. If you are using profunds, the equivalent number of NDX shares (or QQQQ share) is re-established at the end of the day each and every day. Say NDX rises 5% each day for 5 days in a row. The profunds way will give you a profit of (1+2*5%)^5-1 = 61.05%. If you use the orignal # of shares and double the profit at the exit time, you get a profit of 2*{(1+5%)^5-1}=55.25%, which is less but not a big difference. But if the market falls 10% a day for 6 days in a row, with profund way you have a loss of (1-2*10%)^6-1=-73.79%, whereas if you hold the original number of shares, your loss would be 2*{(1-10%)^6-1)}=-93.71%. Seven days in a row will be -79% vs -104%.

The profunds way gives you more profit on the way up and more protection on the way down.

Doing the profunds way would require you to re-establish the number of shares after each day of trading.

Does all this make sense?

Jim