Saturday, January 28, 2012


I am a complete stock maniac, I stay up until the wee hours of the morning back testing strategies trying to find ways to beat the market. The following strategy was back tested for the past 2 years and easily out performed the market.  Again, it is an easy to follow strategy that has worked for the last 2 years. It involves the trading of TNA and TZA. A quick warning, this trading strategy is not for the weak of heart. It's as volatile as it gets and can lead to huge gains and/or huge losses. The swings can easily be 50% in a month or less  

For those of you who are not familiar with TNA and TZA, they are 3x leveraged etfs. It's the wild wild west of the stock trading world.

OK, so this maniacal "investment strategy" goes something like this;
To keep it simple stupid, you buy either TNA or TZA and hold it for one month.
The rule is, you buy either TNA or TZA dependant on whichever of the etfs had the best performance in the previous month. For example if TNA was up 15% in January and TZA was down 12% in the same month, you would buy TNA and hold for the whole month of February.

Furthermore, if TNA outperformed TZA in the month of February, you would continue to hold it.

Or if TZA outperformed in January, you would sell TNA at the end of January and buy TZA and hold for the entire month of February.

DateOpenHighLowCloseAvg VolAdj Close*
Jan 28, 201248.2156.5843.9456.2018,676,90056.20
Dec 1, 201144.3847.8738.9744.8425,622,30044.84
Above is the table for TNA perforrmance: 

If you were to go back and check the price of TNA on December 1, it was 44.84, it is now 56.20. A $10,000.00 investment would now be a bit more than $12,500.00. 

To further illustrate; because TNA outperformed TZA in the month of January, the strategy would then dictate that you would continue to hold TNA through the month of February.
Simple right? But fair warning, it is easy to look at the numbers objectively on paper for a few months, but if you were to sit there and follow it daily, it could get wildly chaotic. 

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