Battle between Bulls vs Bears: ETF hedge strategy

[1957may10]

The problem I see is you are day trading and swing trading at the same time. Especially with leveraged ETFs.

You enter both sides and jettison the loser as a day trade and scale into the position that is positive as a swing trade. Holding overnight has the risk of a reversal and a gap down giving you a loss on both positions.

I'd like to see the trading plan for this strategy, at least the risk control portion of it.

It is a risk, however more often it comes with a few %% rise as market starts and this is win win situation as of now at least. You have over 50% win chance and this is winning strategy.
Besides I’m evaluating the right price. Even when I’m down it will reverse and I will sell it profitable. Works for me so far this year all my negative mistakes I fixed.
Was doing inverses as well, stopped when figured out less chance to profit.

 

[KCalhoun]

I don't like this strategy of hedging with 3x etfs due to massive time premium erosion . For instance if we stay in a 100-200 pt range but its over time and your perfectly hedged your going to lose money overall due to premium erosion. These are no different that options . Not only does your direction have to be right but your timing must be right . The biggest mistake traders make with these is they perceive them as stocks . Like soxs . It hit $187 in Dec 2018 and its $6.50 now. People go wow thats cheap.These are longer term options . Maybe i'm wrong. Try it small and see how it goes .

Right, it may be better for daytrading, eg I went long DUST earlier today, tightened trailing stop, and put in buy stop order for opposing GDX in case it bounces, as a hedge, later today.

The key for daytrading these is they should be trading outside prior days range, like TVIX/SPXL GDX/DUST

 

[1957may10]

Good points, I'm also daytrading to lock in gains on winners, eg I just tightened in trailing stops to .30 on SPXL TNA. I also just entered buy stop orders slightly above market for TZA TVIX in case they bounce.

Probably smart to continue overnight holds at equal capital so gap direction doesn't matter.

So look what inverses are doing now....unless you are buying now, I bought a little just in case.
Sucks your gain. My point if price stock, etf is correct even when you lose you will win later in this volatility.

 

[1957may10]

Right, it may be better for daytrading, eg I went long DUST earlier today, tightened trailing stop, and put in buy stop order for opposing GDX in case it bounces, as a hedge, later today.

The key for daytrading these is they should be trading outside prior days range, like TVIX/SPXL GDX/DUST

When you swinging you should consider yesterday’s 5 10 ema, sma. Swinging on day volume not always works, works today perfect
Still got
M 8.6%
Kss 7.8%
Ccl 3.3%
Will see eod what to sell.

 

[deaddog]

The key for daytrading these is they should be trading outside prior days range, like TVIX/SPXL GDX/DUST

Can you walk me through the strategy with GDX/DUST?

You buy both at the open, then how do you determine when to sell one and scale into the other?

What kind of position size do you scale, compared to your original purchase?

 

[KCalhoun]

Can you walk me through the strategy with GDX/DUST?

You buy both at the open, then how do you determine when to sell one and scale into the other?

What kind of position size do you scale, compared to your original purchase?

Sure, no re buying both at open, I put in buy stop orders for both slightly above opening price, eg 30 to 70 cents on average.

One of them gets filled. I use OTO conditional orders with 1 point trailing stop initially, after it moves up I tighten to 30 cent trailing stop.

I also tighten up entry on opposing ETF. If initial one eg DUST keeps running up I double size eg 70 cents to $1 above first entry

It's a work in progress, testing params

 

[1957may10]

Can you walk me through the strategy with GDX/DUST?

You buy both at the open, then how do you determine when to sell one and scale into the other?

What kind of position size do you scale, compared to your original purchase?

Right, it may be better for daytrading, eg I went long DUST earlier today, tightened trailing stop, and put in buy stop order for opposing GDX in case it bounces, as a hedge, later today.

The key for daytrading these is they should be trading outside prior days range, like TVIX/SPXL GDX/DUST

I like pare Gdx - dust.
I trade gdx a lot at some poin switched to gold (barrick mining).
What do you think about gold - dust pare.
My point when gold starts to rise barrick stocks more dinamic to grow vs gdx etf.
Btw it’s turned back I bought addition below 23 and I’m gaining now.
Pls show your t/as for gdx vs dust, I like it, but want to weigh gold vs dust.

 

[KCalhoun]

I like pare Gdx - dust.
I trade gdx a lot at some poin switched to gold (barrick mining).
What do you think about gold - dust pare.
My point when gold starts to rise barrick stocks more dinamic to grow vs gdx etf.
Btw it’s turned back I bought addition below 23 and I’m gaining now.
Pls show your t/as for gdx vs dust, I like it, but want to weigh gold vs dust.

I like pare Gdx - dust.
I trade gdx a lot at some poin switched to gold (barrick mining).
What do you think about gold - dust pare.
My point when gold starts to rise barrick stocks more dinamic to grow vs gdx etf.
Btw it’s turned back I bought addition below 23 and I’m gaining now.
Pls show your t/as for gdx vs dust, I like it, but want to weigh gold vs dust.

Good point, I'll test GOLD vs DUST as well, I used to trade abx, lots to choose from like NUGT JNUG JDST though I prefer ones under 40

 

[deaddog]

though I prefer ones under 40

Any reason or just a throwback to a time when it was more convenient to trade board lots?

Do you find 20 to 40 dollar stocks have a better percentage move or is it just habit?

 

[KCalhoun]

Any reason or just a throwback to a time when it was more convenient to trade board lots?

Do you find 20 to 40 dollar stocks have a better percentage move or is it just habit?

Some of both; 20-40 has a good balance between leverage/% and volatility