Thanks Duma, much appreciated
Yes, I have only a small account to trade so I am trying to look for the smaller trades with the most leverage. 2002 I traded primarily options but the risk was indeed too high and led me to take a break from trading. Feb this year my pension had a cashout option so I moved the funds into an IRA, so no margin and no options other than covered calls available to trade.
2002 I worked on the MKTSS Plan with Options and it Worked but only if I was really disciplined to follow it, which I wasn't, and I took the higher risk short term option trades. Since Feb this year I have been looking at different Index stocks to use it with and decided on TNA/SPXU, primarily just for the leverage. I could make smaller trades and have the highest return. I have been looking at other's boards who have been trading SPX, for some reason no one trades DIA, and trying to determine what they are trading as far as underlying stocks and charts/trade triggers. I was looking for trend following systems but have found that with the Markets volatility I am back to doing short term swing/daytrades much as I was with the MKTSS Plan, though this time with 3x funds. I am hoping to eventually get approved for options just for the fact that I would not have to risk so much on a trade, limited investment/limited loss but still high return potential. Until then I am in the situation you mention, how much risk do I want to take and should I try to leverage that risk. When looking at the different funds SSO/SDS QLD/QID FAS/FAZ TNA/TZA I determined that most tracked fairly identical and TNA/SPXU were the easiest as far as share size per trade and $ movement for me to target. Yes, having some cash reserve when making the trades is also a factor as I am making withdrawals from my IRA at this time. When I am saying 'look at TNA' your response is exactly what I am looking for, much appreciated. I am still trying to determine why others don't seem to be trading it, primarily I see SSO/FAS traded. If it were something like, the funds settle faster, the fund is more inline with SPX, the fund has a fixed stock base that you know,the fund has a lower margin, the fund has a dividend, etc it would help but most just say 'this is what I trade and why do you question me'. If it is only the leverage then I can also understand that.
Yes, I have seen with the more extreme price movement of TNA/SPXU that getting in at the wrong timing can make for a more difficult trade. The lowered leverage funds are more forgiving if a trade does go against you, while still offering the better gains.
Right now my biggest downside is trade size and risk. Setting a stop on a TNA/SPXU trade has been difficult with the added volatility, and then I usually need to wait for the funds to settle before moving into another trade. I need to work more on setting up the trades using better money management. I have been trying to target 30% trades to keep some funds available for a direction change but a stop out or added position will often leave me waiting for funds to settle, as was the case yesterday. I don't have the skill to enter both on a trade and let one get stopped out and one hit it's target as the Markets volatility would most likely stop them both out imo.
So if you don't mind I have bookmarked your board and will look forward to some more informative posts on how you establish your trades.
Thanks again, Sincerely, Bob
Good Luck to All! :^)
PLAN the TRADE and TRADE the PLAN!
