This strategy worked very well for me and I want to thank you all for the suggestions. It helped me offset the losses from daytrading.
FoN
FoN
Investing in SPY using dollar cost averaging, searching for ideas.
- Thread starter FreakofNature
- Start date
Lets say you start now SPY is 130 (aprox)
Buy 100 shares at every 10 dollar amount, including on the way up and the way down. Once you have bought at that level you are done with that level.
When the market has a 20+% correction, you reset and do it all over again. So if the market went to 105 right now you would have you 2nd 100 shares once it hit 110.
Takes advantage of correction and keeps you in the market a MA levels
Buy 100 shares at every 10 dollar amount, including on the way up and the way down. Once you have bought at that level you are done with that level.
When the market has a 20+% correction, you reset and do it all over again. So if the market went to 105 right now you would have you 2nd 100 shares once it hit 110.
Takes advantage of correction and keeps you in the market a MA levels
The strategy works up to a point.
.
The problem is with the money that you got sitting on the sidelines.
It's greatest strength it's also its greatest weakness, under-leverage.
Sure I made good money on the portion I invested, and the rest ? The one I did not get to invest?
That is still sitting in the bank gaining pennies or worse, slowly draining due to daytrading (lol).
FoN
mkt may never correct and you are only in small. DCA means same amount at regular intervals. Some my be bought higher and some may be bought lower. Time is the key not price.
Traders laugh at it, but you can DCA over months, years or minutes. Most systems can be improved with DCA.
opies question was how to using ES as opposed to SPY, and use the unused margin to earn a return like interest or dividends.
Hard to accurately DCA in ES because as price moves, value of a contract moves.
no prob, money mangement is 90% of what I do, but it still requires about 10% reading the market. Read it wrong and no amount of MM will make you money.
Flawless execution is very rare. Too many good trades get complained at because not enough capital was risked. Nobody ever complains too much capital was risked because they are blown up by then.
Like my Daddy always said, "You can go too slow as much as you want. You can only go too fast once."
So lets say you start right now at 130(aprox) you will buy 100 at 140 , 150, 120...wherever the market goes, but only one time at that level.
If there is a market correction your buy schedule resets and you are free to buy again at levels where you had already bought. So if it goes from 140 to 102, then you would buy again at 110 120 130 etc...