You’re asking what could be/should be done with/about SOXL/SOXS.
I’m going to throw the question right back at you. You tell me what should be done. Seriously. It’s your money, not mine or Quill’s, and he takes risks I never would, just as I mess with things he’d never touch. You shouldn’t model your investing/trading methods on what either of us would do, but on what you can prove from back-testing works for you.
But I will say this. Pull a 1-month chart with daily bars of either of those contracts and actually look at it. The chart is a godawful, choppy mess that frantically switches from red to green and back again faster than can be profited from using a delayed entry system, never mind also needing to understand the fundamentals of the industries underlying those contracts (which Quill does for having worked in it/them).
Suggestion: What Quill calls his ‘Tetter Totter’ system is just another name for ‘Stop and Reverse Trading’. If that’s something that appeals to you, then build a set of entry/exit rules and apply it to lots of stocks/ETFs, across lots of market conditions.
What I’ll predict you’re find is this. Some contracts are easier to trade than others. Some market conditions are easier to trade than others. What’s happening macro-economically and geo-politically right now is causing the big boys a lot of uncertainty that the algos are exacerbating. Frankly, I’d stand aside from trying to tetter totter the SOX pair and find some nice, quiet, obscure corner of the market to practice in where exogenous factors won’t make a mess of the chart.
Thanks for the reply Arindam,
To be clear, I’m not modeling my investing after someone else. Rather, I am learning from those who seem to have their own system so I can make my own tweaks to it (or dump it altogether) and make my own system. I wasn’t talking about money…that is all our own responsibility. I am merely trying to understand this particular system in depth. As an example, I taught students exponents today. I modeled two different methods and made them practice both. In the end, I told them to go with what felt more comfortable and efficient to them. I think most of us learn that way. I think it’s good exercise to question what someone else would have done so that we can evaluate whether or not we believe it has merit.
Now, as to my thoughts on this trade…it is ambiguous to me, as it seems to whipsaw too much (much like you stated). Therefore, I would not be in the trade. If I were in, however, I would have sold.
Let’s forget the heavy math and present the SOXL chart to your class and per the Two (2) simple rules, buy 1000 shares on 12/29 and Sell at the next Sell signal. Buy 1000 shares on 10/14/22 and sell at the next Sell wait-one-day signal. Just don’t buy a Lambo.
My two 6th grade nieces are now 9th graders and are in the 6-digit figures. Who needs a job and enjoy life and see the world at their leisure.
Have Laptop will travel. aka the Office. Any profits are plowed into the Dividend Investment pool. e.g… JEPI, JEPQ, QYLD, VOO, VTI.
re: SOXS
Now notice there was no label to buy. This happens a lot and we have to look at both of the at the same time.
re: SOXS
Buy signal appeared after the bar after the Bottom appeared.
Notice the TSI confirmation signal.
If not sure, jamb the chart to the left wall to only have 2 ARCs to appear.
Always must have at least two (2) ARC’s aka smiley faces as you jamb the chart to the left.
Practice, practice on at least 20 charts a day to get acclimated.
Here’s an easy to remember rule. “When in doubt, get out”, or better, don’t even attempt the trade in the first place.
I made no attempt to answer your question about 20-periods MAs and such, because I don’t use them. Worse, I can prove that Quill’s much favored 13/50 X-over system is nonsense. However, he’s got a track record of him making it work for him. So, who’s right? That’s why I was pushing you to decide what entry/exit rules you want to try to use and then to test, test, test.
As I keep saying, “No one can trade another man’s system.” Secondly, “There are no roads but by walking.”
Hay, I was taught the 13/50 xover while caddying for two Investment Bankers at the age of 16 who gave me lessons plus creating hand crafted chart plots on graph paper and observe the highs and lows noting the prices for each of the High and the Lows,
Quill - a poor church mouse scratching for a living as a Swing Trader for over 48 years and an Investor for over 60+ years. Have a 9 hcp in Golf.
You and I have argued the merit of your 13/50 X-over system before. But I’ve run the backtests with MetaStock across hundreds of stocks and years of data and found there is zero magic to that pair of numbers. That’s the reality I have to trust.
You, however, have years of experience with the system giving you a favorable result,
There is nothing like burning the midnight oil in studying charts and place trades with real money on the line that pays the rent and puts food on the table.
Granted I do lose a few dollars in the process. The power of compounding and more compounding werks every time over DATA. IMHO, compounding does not show up from one trade to another trade with DATA analysis that I know of.
I have traded Seasonality stocks via 13/50 for several years and earned over 716K before I stopped and moved on to other projects and Simon & Co. If I can find the excel sheet, I’ll send it to you.
With Seasonality I would have to wait 30 days for the next month’s play. There were some losses. Well, Simon is another story on to its own. The little ATM machine that could.
“The power of compounding and more compounding werks every time over DATA. IMHO, compounding does not show up from one trade to another trade with DATA analysis that I know of.”
Quill,
I love you dearly. But your expertise is in making shrewd trading decisions, not in backtesting trading systems. As for ‘compounding’, aka, ‘position-sizing’, that, too, is just math, your admitted weak point.
Look. Both of us have been at this game a long, long time, have done well for ourselves, and are still scrambling to learn more, as well as offer a bit of help and encouragement to others where we can. You believe that if others do what you do, they will prosper, too. I take the opposite tack and say, “You gotta find your own way. There are no roads but by walking.”
