Leveraged and inverse ETF performance with no costs:

Anyone playing IBB ether way next week?

I like it in theory but the problem is you risk it running to $150, clear breakout here to new highs (the $150 or $75 side bet is getting close again). Where is your negative catalyst outside of earnings? Valuation doesn't really matter in these short term runs.

TNXP looks like a flag forming here. Has trend support from start of December. Lol ETRM 2 to 8? Next OREX there.orex prob drop another 40% next week

Bought some GILD with potential bull flag on daily and strong weekly close alongside strength in biotech etfs

Slowly learning to wait for backtest confirmations on key support levels before entering positions. Patience is key

Monday should be a big day for the industry as a whole. GILD CELG and a bunch of other big names should be updating guidance for the upcoming year.

Trump probably got a tweet lined up for sector regardless

Here's my 2016 with 2015 below. I left out my side account I trade which represented about 10% of my returns. I thought 2015 was my breakout year but 2016 was great. The chart looks kinda hairy which I think is mostly due to bad marks on option trades.

Would you be interested in sharing a setup you like? Long or short?
Do people think sharing their spots on forums like this lessens their edge?

I enjoy hearing the setups/plays as well. Wish we posted more of them to analyze. I find myself making a lot of "intraday" trades, for example I shorted WFC this morning at 55.19, covering at 54.94 about an hour later. Then near the close, shorting at 55.21 covering at 55.08. But i'm not sure if that's "useful" for purposes of this thread, or if i'm just cluttering it up so I generally just keep it to myself.

Extremely impressive results jb, I didn't realize people were even making those kind of returns YoY.

I think i'm getting way better with stops & take profits, but I sometimes still feel like i'm playing Omaha with 3 cards or something, I know there's information and utility i'm missing. But i'm not a pro, i'm just trading recreationally from work.

I'll bite.

What's causing this? I guess I've seen the commodity ones, learned about Contango and thought that carried over to all leveraged ETF's. What's with the sub-par performance? And what's going on in this table?

I've been studying simple and exponential moving averages as support/resistances for entries/exits and I realize TA gets quite a bit of hate around here, but after watching real time charts bounce off specific levels, or break out from tough resistances time and time again, it has been quite eye opening. I also realize TA is essentially a self fulfilling prophecy, but the more exposure it gets the more beneficial it becomes. I do think price action and volume are most important indicators, but being able to visualize price levels for short term price movement is very helpful for day trading successfully.

there's no subpar performance in that table. that's how the math works out. in the absence of trading costs, a 3x leveraged ETF will gain >3x in a trending market and will return <3x in a choppy market.

in reality leveraged ETFs perform a lot worse than that because they have to trade every day. as assets under management and volatility in the underlying increase, the slippage increases too. that's why they often severely underperform their theoretical returns.

huh?

Arithmetic. Leveraged and short ETFs suffer in markets that aren't unidirectional. Unidirectional markets are pretty rare. It has nothing to do with anything other than leverage.

Contango/backwardation matters a lot in funds that trade futures. That is pretty important when trading VIX futures. The math results that I showed have nothing to do with contango/backwardation.

Nope!

No, you are wrong there. An unlevered ETF would not track the underlying perfectly (it would degrade overtime). How do you think these things work? There are internal transactions costs and management fees for tracking the underlying.

They don't just happen magically. There are traders / algos that execute trades and offer the result in the equities markets...

Look at spreadsheet I posted. There is nothing special to leveraged/inverse ETFs that is not included in the spreadsheet.

Depends on the trade since some things are way more scalable then others. We learned a strategy from another firm that basically stopped worked once everyone figured it out. Then it seemed like some people stopped trading it and it started working again about 6-9 months later.

I'm long RAD WR WWAV (merger arb) and short NYMX AVXL WATT (joke companies). Ideally those are all fairly uncorrelated

Appreciate the response! Are you shorting the underlying or using options?

VN!!!

So iam considering getting a ETF for the Shanghai Composite as a midterm investment, that i could sell if upward spikes happen.

Is there some big thing about china i should know before investing?

What i looked at so far seems fine. Economy is still a powerhouse in reform, markets are going up, banking system seems sound, government goes for stability.


The biggest question mark is whether or not Trump will/can send the SSE down with his Twitteraccount. Or did i miss something important?

Just giving my gut feel advice on China, but if I was an investor I'd be waiting until after Trump was sworn in. You're what, 12 days from it?

I think that similar advice I'd apply to a lot of mid or long term trades in murky areas right now. Of course that advice goes out the window if you feel you have an edge with regards to some policy announcements or something. I have none so I'm enjoying the time off.

One of the others may make a compelling case for that advice being wrong, but overall I doubt most traders/investors are equipped for the sort of moves that Trump can cause when he starts to rattle the cage in January. The flip side of the coin is that seasoned traders are going to make a fortune off that volatility. I wonder if they'll let him keep tweeting like that. I don't expect the market at large to be nuts, but sector specific volatility seems like a lock. Chyyyyyna being one of areas Trump might want to start with.

Good point, going to wait out the next few weeks, if he sends the markets down i might buy them cheap.

Anyone have thoughts on REMX?