bbgold,
Great response. You said you can't figure out why most traders trade SPY and not IWM (doesn't matter if it is 1x, 2x, or 3x). I wonder the same thing and advocated IWM on a few other boards but got nowhere. I finally decided that they have so much history in following SPX that they just don't want to change. I certainly understand how that plays into one's thinking. I traded QQQ for years and just early this year changed to IWM. It was a major mind bending proposition for me because I had so much history with Q's. But in the end, it was the right thing to do and now I am very pleased and comfortable with IWM.
I want to expand on your statement "the lower leverage funds are more forgiving." If I invest $3,000 in IWM and $1,000 in TNA, no matter what happens the outcome will be the same because the investment levels are exactly the same. One took less cash, but the risks are exactly the same. Now if you invest $3,000 in IWM or either TNA, then what you said is correct, but it because your investment level is 3 times higher with TNA, not because you are using a 3x fund. In the first example I used a 3x fund, but the risks were no different. It's all about investment level.
You talked about investing at 30% levels and having to wait for your funds to settle before you can trade again. This is the perfect time to use a 3x fund because you only need 1/3 of your cash to be fully invested. It sounds like this is exactly what you are doing. Good deal.
Based on reading my posts you probable think I am a short term day trader, but that is not true. I am really a 1-5 day typically swing trader or momentum trader. I use a 60min chart I call SR60. All my charts are in the iBox if you want to review and I use the sticky posts to trade the results. I took a short term break from holding over night this week because of the summit in Europe, but I will be back to it soon.
Great to have you around our board and I hope that it will be beneficial for you.
Good trading,
Jon
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