Buy TQQQ –> Sell at QQQ 200 SMA = easy money?
From my calculations, buying TQQQ when QQQ goes above the daily 200 SMA and selling when QQQ goes below it would earn you a total return of 14,390% from 11/24/10 –> 1/20/2022. This absolutely crushes buying and holding QQQ during the same time period (596%). Buying and holding TQQQ long term would earn 9,146% (don’t recommend). There was only one time during my backtest where TQQQ went down from 4.10 to 4.04 (-1.46%).
I know holding TQQQ long term is dangerous because it can go to 0 if QQQ goes down by 33% in a single day. However, having a stoploss set at the moving average completely prevents that. Some negatives include huge drawdowns (40%+) but when compared to overall returns this method still destroys buying and holding QQQ or SPY. Another downside is you would have to pay taxes on the realized gains when the stop loss is triggered. You will also lose out on dividends when it hits the stoploss. If you have a large account, there will be slippage when buying back in after QQQ goes above SMA.
I’m sure there’s a bunch of reasons why this wouldn’t work so please heavily criticize this “strategy”.
Submitted January 27, 2022 at 12:01PM by J-Kole
via reddit https://ift.tt/3Ha5D84