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nibor100
401 posts
msg #147319
Ignore nibor100
4/11/2019 1:10:02 PM

Hopefully by the end of this thread I'll have presented some reasonable trading methodologies for TQQQ and possibly SQQQ...though it may take a while as I tend to get easily distracted....

1. First some basic TQQQ history:

Its been trading since Feb 2010 so there are actually quite a few years of data to look at though most of it has been since the big market drop in 2008, i.e. most a bullish market.

a. Thru April 5th, a mere 2,303 days of trading. (Note I downloaded historical data from Yahoo Finance into Excel to do some of this)

1,279 of those days were up from the previous day, 7 days had no change, and 1,016 were down from the prior day. Roughly a 55.6% chance of picking a gainer.

b. If you started with a $10,000 portfolio in Feb 2010, and compounded daily trades thru Apr5th 2019 you could have ended up with about $355 thousand not counting commissions and taxes, etc.

4 times your portfolio would have dropped below $10,000, with the lowest point being $8,759 or a drawdown of -12.4% of your starting capital. After Sep 2010 it would never be below $10K again.

c. Could you possibly day trade TQQQ better knowing some of the following statistics....

269 times a single daily gain was followed by a losing day and preceded by a losing day.

Yet, 715 times a single daily gain occurred the day after a daily gain.

More to follow,
Ed S.





nibor100
401 posts
msg #147334
Ignore nibor100
4/12/2019 1:09:55 PM

Below are the rules for a TQQQ/SQQQ trading strategy, developed by an acquaintance, that I had forgotten about. In 2015 it had 186% total gain on a compounded basis, in just 19 trades.

I have not created a filter for it yet in SF, though I'm curious to see how its performed with the latest 3 years of data.

Ed S.

Setting for the Stochastic Oscillator is Slow, 14, 3.
Requires displaying Candle Sticks on your chart
with Bollinger Bands at settings of 20,1.

Trading Rules

1. When the Stochastic %K goes above 20% and going above %D, then buy.

2. When %K turns down through the 3 day average (%D) and difference is > 5%, sell the position.

3. When %K turns down through the 3 day average (%D) and difference is < 5%, stay long.

4. When %K is above 80% and the price candlesticks are above the upper Bollinger Bands hold your position until the price candlesticks are below the upper Bollinger Band.

5. If you sell a position and then in a day or so the stock goes up again, buy only if %K is less than 40%.
.



nibor100
401 posts
msg #147574
Ignore nibor100
4/26/2019 6:35:40 PM

The guy whose system I described in the last post did backtests in 2014 and 2013 before he started trading live in 2015.

In 2014, the backtest results were total gain 108.2% on a total of 17 trades of which 6 were losers. The trades on TQQQ far outperformed the trades on SQQQ.

In 2013, the backtest results were total gain 123.5% on a total of 11 trades of which 2 were losers. The trades on TQQQ also far outperformed the trades on SQQQ.

not much progress yet on my SF filters for this approach...so much stuff to do and so little time, I may have to retire from being retired

Ed S.

nibor100
401 posts
msg #147690
Ignore nibor100
5/4/2019 6:57:06 PM

1. Thanks to a Graftonian question, I researched rule 4 further and it should have been written as follows:

Rule 4. When %K is above 80% and the price candlesticks are above the upper Bollinger Bands hold your position until the the entire body of the price candlesticks are below the upper Bollinger Band. Ignore the candlestick shadows

Apparently the developer of this strategy got the Bollinger Bands idea from an article in July 2014 in Stocks and Commodities mag by Dr. Barbara Star entitled "Profit With Dual Oscillators & Bands"

2. Of course everyone is curious about the monthly seasonality for TQQQ so here are some data tidbits courtesy of Stockcharts.com: (note: I'm new to this feature on Stockcharts.com and I haven't verified any of this data using other means)

a. July is 9 for 9 in having a monthly overall TQQQ gain with an avg monthly gain of 12%.

However, June is only 3 for 9 in having a monthly overall TQQQ gain with an avg monthly gain of -4%

February is the next best month to be in TQQQ as it has an avg monthly gain of 9.2% and is 8 for 10 for months with gains.

b. Most months of the year have 9/10 year avg monthly gains; and besides June, Aug at -0.0% and Dec at -1.9% are the lone other months of the year with avg monthly losses over 9 years.

c. I suspect no one actually trades TQQQ by buying at the beginning of the month and selling at the end of the month....more to ponder!

Ed S.


nibor100
401 posts
msg #147704
Ignore nibor100
5/6/2019 3:21:20 PM

In case some of you missed it, SafeTrade posted a filter on the Public Filter List forum, Friday night, that includes TQQQ and SQQQ and various technical indicators and also a Buy and Sell indicator based on RSI(2) levels that is definitely worth careful study.

a. I've already noticed that his 40 line drawn on the Slow Stochastic (14,3) %K has shown that prior posted Rule 5." If you sell a position and then in a day or so the stock goes up again, buy only if %K is less than 40%."

would have held one out from making a TQQQ buy on March 11th, where the %K value was not below 40%, as it was 40.55, resulting in missing the subsequent +15% rally in TQQQ.

b. I'm not sure how he latched onto 70 as a RSI(2) buy level for TQQQ but it seems to work fairly well but I need to study the Sell criteria further...

c. I also like his method of drawing a Zero line indicator chart that he can add and easily see the indicators he really wanted to see drawn.

d. Next up for me, will be studying the 2 non standard MACD indicators he has in that same filter.

Ed S.



nibor100
401 posts
msg #147973
Ignore nibor100
5/30/2019 1:20:14 PM

a. In my earlier post on the monthly seasonality for TQQQ I wrote " Most months of the year have 9/10 year avg monthly gains; and besides June, Aug at -0.0% and Dec at -1.9% are the lone other months of the year with avg monthly losses over 9 years."

b. May is one of those months that averaged a profit over 9 years of monthly data at +2.7%.

Of those 9 months 3 had losses and 6 had gains for an overall seasonal monthly probability of gain of 67%.

c. Knowing there was a seasonal based historical 67% chance of May 2019 having a gain in TQQQ, I thought it would be interesting to see how things turned out, even with yet a day and a half to go!

First, a little more data about TQQQ May performances:
The first 3 years TQQQ lost money in each May to the tune of -22.8%, -4.3%, and -20.4%.
The next 6 years were profitable May months.

However, this year looks to be a losing month in May as TQQQ is already down -19.1%.

Apparently, "Sell in May" isn't over with yet!

Ed S.


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