What's the correct name for this trading technique... (pair, hedge, arb)?

[KCalhoun]

This strategy has been my best daytrading one lately, making more profit than simple breakouts:

I trade inversely correlated etfs against each other. When SOXL goes up, SQQQ/UVXY goes down. Like LABD/LABU, SOXL/SOXS,GDX/DUST etc


When SOXL goes up, I buy it. As soon as it looks like it's going back down, I tighten a trailing stop and immediately put buy-stop orders in for SQQQ/UVXY.... once they fill and go up, as soon as they start to go back down, tighten trail stops and get back into SOXL.

Works great in whiplash markets like last week's.

I'm not sure of the best/correct name for this technique: pair trading, hedging, arb? thx

 

[cruisecontrol]

Sounds like momentum trading to me. You are going long after stuff goes up and short after it goes down again.

The fact that you are going short by going long inverse ETFs probably just complicates things, I highly doubt you are doing arbitrage by hand without knowing it. That is a competitive game for HFT algos.

 

[newwurldmn]

This strategy has been my best daytrading one lately, making more profit than simple breakouts:

I trade inversely correlated etfs against each other. When SOXL goes up, SQQQ/UVXY goes down. Like LABD/LABU, SOXL/SOXS,GDX/DUST etc


When SOXL goes up, I buy it. As soon as it looks like it's going back down, I tighten a trailing stop and immediately put buy-stop orders in for SQQQ/UVXY.... once they fill and go up, as soon as they start to go back down, tighten trail stops and get back into SOXL.

Works great in whiplash markets like last week's.

I'm not sure of the best/correct name for this technique: pair trading, hedging, arb? thx

long synthetic straddles.

 

[M.W.]

You keep on posting this. But from an analytical standpoint your spreading those inverse instruments don't add to alpha generation at all. It's the facts that in certain times assets mean revert. You can as well trade a bunch of mean reverting instruments. Your profitability has nothing to do with the fact that you trade an instrument that goes up when the underlying goes up and another instrument that goes down when the underlying goes up. You could as well have just picked two uncorrelated instruments and traded the mean reversion...it is at least not apparent why your choice of instruments has any particular bearing on your performance. Could it be that you just like to make it sound esoteric and opaque to attract beginners to something that seems complex when it actually is not?

As others said, you are probably a victim of believing you are engaged in hedging when you are actually only subject to trending or mean reverting properties in certain market regimes.

This strategy has been my best daytrading one lately, making more profit than simple breakouts:

I trade inversely correlated etfs against each other. When SOXL goes up, SQQQ/UVXY goes down. Like LABD/LABU, SOXL/SOXS,GDX/DUST etc


When SOXL goes up, I buy it. As soon as it looks like it's going back down, I tighten a trailing stop and immediately put buy-stop orders in for SQQQ/UVXY.... once they fill and go up, as soon as they start to go back down, tighten trail stops and get back into SOXL.

Works great in whiplash markets like last week's.

I'm not sure of the best/correct name for this technique: pair trading, hedging, arb? thx

 

[KCalhoun]

Thanks, good insights. Right re mean reversion price action.

2 key points:

- works best with widest range charts outside of prior day's high/low

- is a great way to hedge reversals because one Always goes up when the other drops

 

[TheDawn]

This strategy has been my best daytrading one lately, making more profit than simple breakouts:

I trade inversely correlated etfs against each other. When SOXL goes up, SQQQ/UVXY goes down. Like LABD/LABU, SOXL/SOXS,GDX/DUST etc


When SOXL goes up, I buy it. As soon as it looks like it's going back down, I tighten a trailing stop and immediately put buy-stop orders in for SQQQ/UVXY.... once they fill and go up, as soon as they start to go back down, tighten trail stops and get back into SOXL.

Works great in whiplash markets like last week's.

I'm not sure of the best/correct name for this technique: pair trading, hedging, arb? thx

Volatility play.

 

[easymon1]

I trade inversely correlated etfs against each other. When SOXL goes up, SQQQ/UVXY goes down. Like LABD/LABU, SOXL/SOXS,GDX/DUST

 

[GoldDigger]

IDK what it's called but could you please post
all your other proprietary methods on here.

Thanks

 

[traderjoe200]

i looked at the web site,...i think you would be better off WITHOUT those propriety methods.....just saying.

 

[traderjoe200]

i am a momentum trader. now the trick is defining what "momentum" is. i go after the fast movers. volatility is what makes me smile. Typically low floaters. The set up is what im looking for for. Trade the setup - not the stock. you have to define your style