Solving the ETF hedge puzzle... your ideas?

Discussion in 'ETFs' started by KCalhoun, Jun 16, 2020.

  1. KCalhoun

    KCalhoun Sponsor

    based on my TASC article:
    http://technical.traders.com/archive/archivelogin.asp?file=\V37\C07\879CALH.pdf&src=SC

    I think there's a lot of potential in this strategy, once refined. I'd really appreciate your advice on how to optimize it for daytrading:

    ETF pairs like TNA/TZA UCO/SCO are inversely related. Mirror images.

    If I buy both TNA & TZA at the same time in the morning and sell both at the same time later in the day, profit from whichever moved up will offset losses from the one that moved down.

    So we're at guaranteed breakeven. How would you scale or use trailing stops to daytrade to turn a profit?

    Lessons learned:
    • I've tried using buy stop orders .50 cents above opening price to try and just enter whichever trends up, but many times they whipsaw, so that doesn't work on choppy days
    • Same issue with trailing stops, unless it's a strong trending day
    • Need to solve for all types of days, eg V-shaped midday reversals, eod squeeze, choppy rangebound etc.
    What I like about the strategy is we're starting at breakeven, to minimize risk. Now how to manage stops and scaling to get it generating profits most of the time?
     
    Last edited: Jun 16, 2020
    murray t turtle likes this.
  2. Is this satire?
     
    Scataphagos likes this.
  3. %%
    Something like long /strong tqqq;
    +sdow/weaker. Actually, accidently had niceprofit turn into loss on sdsow. But since I trade main trend larger/tqqq than SMALLER countertrend sdow, overall profitable on tqqq ,,,:caution::caution::caution::caution::caution::caution::caution::caution::caution:,,,,,,,,[SDOW USALLY WEAKER BUT NOT TODAY]
     
    KCalhoun likes this.
  4. KCalhoun

    KCalhoun Sponsor

    In testing today with 30-share trades with 1point trailing stops I mostly got stopped out because of choppy market reversals. Trading TNA/TZA SCO/UCO.

    This works best in trending markets, I need to figure out how to set trades in choppy markets too.
     
    murray t turtle likes this.
  5. %%
    I try to avoid chop/slop trend; i'm about ready to look more @ spec home fix up- did a lot of that...…………………………………………………………………………………………………… I made a small profit on udow, but that was april seasonal...... + seldom do udow/actually made more on ddm/almost half price of what udow is. But I seldom trade either of them/tqqq tends to outperform it...………………………………………………………………………………[udow had a much more/ huge/odd 52 week drawdown, than ddm=amazing]
     
    KCalhoun likes this.