Thank you so much everyone! And I follow that BKR88! So, let me ask you this. Is the fact that those leveraged funds experience the effect you are describing not evidence that the applicable markets (in the case of SQQQ, the QQQs) tend to be "revisionary" rather than "trend following"? Not the right lingo obviously, but I think you can see what I mean. I say this because, I think using that same type analysis, if you have the QQQs go up in 2 or more periods in a row, the SQQQs will actually do BETTER than 3x as good as the QQQs. I mean, is this something we can learn to help us make more money in the market generally, by tending to fade things? I always thought the futures tended to drag down performance because there is no free lunch - you have to PAY for that leverage. But putting these funds aside, and asking a different question, can you essentially get free leverage lunch by buying QQQ futures for example rather than QQQs? That would seem like free lunch - if that is the case you can buy QQQ futures (or if those don't exist, Naz futures) using much less than 100% of the money you'd otherwise spend buying the QQQs (like 33.33% of it), and the difference you could put in an income producing security, and thus get ~100% of the upside on the QQQs plus the extra income on the income producing security, with would be significant if you have 66.66% of your account in it. Thanks again everyone!
Comparison: NQ Futures contract: Margin requirement for 1 contract = $15,800 (Amp Global) 5% increase in value = 12,662 (current price) x .05 = 633 x $20 (value per pt.) = $12,660 profit QQQ Shares: $15,800 in shares (same $ invested as 1 NQ futures) 5% increase in value = $15,800 x .05 = $790 profit Obviously the futures gives you much more leverage than QQQ (which can be purchased on margin at x2) so if you want to "invest" in the nasdaq your best bang-for-the-buck is with NQ futures (or options) but looking at the example above, if the market drops 5% you'll be required to add more funds as your initial margin requirement is almost gone with the 5% drawdown. As for trying to game the leveraged ETFs for a profit, I did some review of it years ago with the leveraged ETF options but didn't come up with anything solid but wouldn't be surprised if the options gurus here could find something.
Hello SoyUnGanador, Why not just dollar cost average TQQQ for the next 20 years and make a million dollars?