Market Direction Portfolio: Triple Leveraged ETF Trading Tips for Apr 12 2016

On Monday April 11 there were no changes made to the Market Direction Portfolio.

Triple Leverages ETF products can provide large profits if the proper strategies are employed. They can also leave investors with large losses if they trade without proper goals and a strategy.

Decay Of Triple Leveraged ETF Products

The Market Direction Portfolio is comprised solely of Triple Leveraged ETF products. These include UDOW, SDOW, TQQQ and SQQQ.

Many investors worry that by holding these Triple Leveraged ETF products for long periods of time, such as a month, they will experience losses through a decay of the value of the products themselves. Often referred to as slippage or beta slippage, decay of these Triple Leveraged ETF products is not always the case.

Decay is most noticeable in a sideways market that trades sideways for weeks to months and least noticeable in markets that are moving up or down, even with small moves.

In the Market Direction Portfolio I have constructed, slippage is rarely a factor as the portfolio is normally traded more than once over a period of a few weeks. Statistic also show that holding Triple Leveraged ETF shares even for a year can return substantially more than holding the index, if the ETF held is the correct one for the market direction experienced for that year.

Even for 2016, the UDOW ETF has actually performed quite well and definitely better than the Dow itself. On Jan 4, buying the UDOW at the opening of trading would have cost $61.15. Today at the close of trading the UDOW could have been sold for $65.45. This represents a gain of $4.30 or 7%.

The Dow Jones opened at 17,405.48 on Jan 4 and closed today at 17,556.41 for a gain of $150.93 points for a return of 0.86%. Obviously holding the UDOW worked well since the start of the year despite the pullbacks and the number of days of sideways movements this year.

Market Direction Portfolio Strategy Tips For Apr 12 2016

Here are my strategy tips for the Market Direction Portfolio for Tuesday Apr 12 2016. I have outlined what I am expecting for Tuesday’s market action and what changes, if any, I have planned for the Market Direction Portfolio.

Market Direction Portfolio: Triple Leveraged ETF Trading Tips

FullyInformed Members can review the USA Market Direction Portfolio Triple Leveraged ETF trading tips before the markets open directly through this link or they can sign in to the full site here. Non-members can join here or read about the benefits of a membership.

Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. Trade at your own risk. Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed and presented are financial or trading advice or recommendations. Everything presented and discussed are the author’s own trade ideas and opinions which the author may or may not enter into. The author assumes no liability for topics, ideas, errors, omissions, content and external links and trades done or not done. The author may or may not enter the trades mentioned. Some positions in mentioned stocks may already be held or are being adjusted.