Day trading tza
As options tend to be, they basically are a zero-sum game, when one goes up the other goes correspondingly down, though some correctly will quibble with that and note that they do not completely cancel each other out. For the most part, though, they are Yin and Yang.
If you are playing the Russell up, you long TNA or short TZA, and vice versa. These are not for the faint of heart. They definitely are NOT for newbies, and nobody should play them on margin. You will blow your account.
They move fast and are unforgiving. They are said to be good only for daytrading, but doing that can be extremely dangerous. They move so fast that if you get the direction wrong, you are hosed.
No other likely outcome. I find that, despite all the admonitions and warnings, they still can be worthwhile. One way is just to time them right. Figure out the right timing and direction, and you are golden. Unfortunately, I have found in my trading career that it almost impossible to get timing and direction right at the same time.
OK, so now that you know where I stand, why do I trade them? I wanted to see what they can do. If you learn how to handle nitroglycerine, then working with dynamite becomes a little less stressful. I refuse to be intimidated by any securities. I am now comfortable with them. But, of course, the objective always is to make a profit.
I have found — and maybe this is just me — that trying to daytrade them is very difficult. They are just too unforgiving. But swinging is another matter.
How to Day Trade Using Leveraged ETFs | Investopedia
If you want to buy and hold, I can give you a whole list of great, great stocks GE, ED, INTC, etc. But so can anyone else. My point in writing this is to give you a different perspective, perhaps, on these two particular trading vehicles. And that is what they are, trading vehicles. They are not for widows and orphans, as the saying goes. You buy them in order to sell them, not to harvest dividends and wait for splits.
But saying they are trading vehicles does not mean a good holding time is necessarily measured in minutes. When you trade like that, you may get the odds in your favor through various technical measures, but really you are just gambling. You are simply gambling at one of the easier tables in the casino.
There are very, very good gamblers, and very, very good daytraders. If that is you, you have my admiration and respect. But my experience is that very, very few people are good gamblers, and very, very few people are good, consistent daytraders. You should only use these particular vehicles, in my humble opinion, to play a trend.
You can play the bounces in a counter-trend, but you better be nimble and lucky at catching the real bottoms, not the bear flags. Otherwise you are hosed. It is much wiser to play in the direction of the trend. Try that with a counter-trend play and you may be waiting a long time. If you are going to play a trend, you can daytrade, for sure.
TNA/TZA daytrading | Day Trading Alerts, Strategies, and Live Training
But if you are confident you have the trend nailed, I would not to do that. You actually reduce your risk by just letting the position ride until it is time to sell.
If unsure about when to sell, wait for the market to tell you. With these particular securities, that can be a dramatic, even traumatic experience. If you were holding TNA then perhaps in anticipation of a trend change due to oversold conditions , the generic advice that these things are only worth daytrading would have been completely wrong.
It would have cost you gains. The highest-reward strategy, in hindsight? Well, if you thought the trend had changed, that is easy. Hold the darn thing! You would have almost a double after three weeks. Try doing that with AAPL or some bond.
Hindsight is always perfect.
But my point is, if you make the decision to ride the trend and, of course, catch the right trend, this strategy works. Well, the optimal strategy for this would have been to sell it at some point during the previous uptrend. Over a third of the losses on this happened in 45 minutes on October 4th, just as the same amount of gains accrued during that time to TNA.
These instruments are volatile, but they respect the trend. So either ride it, or completely avoid it. There are a few other things worth noting. You can see the results of that with TZA.
Blink, and you lose a huge chunk of your gains. Get out while the getting is good. With these more than anything, getting greedy will hurt you. Conversely, if you do think a trend change is imminent, it is prudent to pick some up BEFORE the trend changes. Yes, you will have to hold it at a loss for some period of time. But look at the potential gains of doing so! There are some, shall I say, advanced strategies you can play with these. Trader 3xshort in StockTwits suggested shorting the opposite instrument for the direction you want, rather than going long.
You also could consider simply shorting them and waiting for them to go to zero. Maybe someone else can work that out in greater detail. Finally, some claim to hold both at once, and adjust their positions based on market conditions. So, if the market rises, you would take some profits in TNA and keep your TZA, and so forth.
That strategy requires a lot of patience, but I can see how it could make you money, though it also would tie up a lot of funds.
A lot of people think the market is getting over-valued. I can see valid points on both sides. I think a market turn is coming, and soon. Surveys show the herd turning from Bearish to Bullish, the Europe news is out and no longer driving things, and an awful lot of weak hands are holding an awful lot of profits. One curious and almost completely coincidental point leaps out at me. TNA bottomed on October 4th at TZA just bottomed yesterday at May not mean a thing. TZA may go to 10, who knows. But quite an interesting coincidence, in such similar circumstances.
As I said, you could see a lot of gains at the turn, but trying to time the trend change is next to impossible. For that reason, I made the decision to pick up some TZA today and wait it out. Yes, it is a wasting asset, but if the trend does change to the downside as has happened with some regularity recently, the gains could be tasty. It may be a day, it may be a week, it may be longer, but eventually this market is going to turn.
Hey Slayer good ideas on XXX s.. I ususally use very small portions so I can average down until it rips. But never more than my total alloted amount for the trade..
I actually tried this strategy years ago. I did well until one day like yesterday when the market just took off in one direction and I was already in the hole. Within days I was 10K in the hole. Furthermore I was recycling dollars and making Etrade rich. Hard to beat the HFT machines in this game that way. I can only say good luck. Everyone points out that sentiment is too bullish now for the market to continue to rise. Everyone also seems to expect at least a short-term pullback.
Those two reasons alone are why we will continue to go up. I took a real hit being on the wrong-side during this Twighlight Zone rally.
The problem with holding single inverse leverage wrong side of market is that your Uncle Point usually coincides with the exact moment the markets move in your favour. And that one smarts. A dead clock has the right timing twice a day — inverse leverage better be right and better be quick.
And good thoughts there. The leveraged ETFs are generally murderholes and serious risk management and hard stops must be adhered.
Or, buy small if you really want to play. The market is all about capital preservation, I have learned that from some really great traders, and very seldom, VERY SELDOM, do they trade these leveraged products. I am not sure if 60 minutes said that, but that is ludicrous. I was a professional daytrader for four years, and netted a great deal more than that in two of those years.
The best traders I worked with made over 7 figures in and As an alternative, why not just buy in-the-money calls or puts on IWM? Your max risk is clearly defined, you can gain more leverage with a smaller amount of capital and you can actually do technical analysis on Russell index or IWM charts.
By buying ITM, your premiums will be higher, but you at least have some intrinsic value unlike OTM lotto tickets. Additionally, trying to glean technical information from 3x charts especially 3x inverses is a dicey proposition…at best.
Should you Hold tza long if you bought it high will it eventually come back up! To where you bought it!
Small Cap Bull & Bear 3X ETFs | TNA, TZA Funds | Direxion
Or is it a loss! I actually trade them all the time. In fact, they are the only thing I trade. Here is what I will say. Most trades are quick…some as fast as 5 minutes. You need to play breakouts only, and get out and reverse your position if it breaks the other way. They will slam you. You need to watch candle movement, pick your entry based on a strategy, and get out as quick as you are satisfied and how the candles are still forming.
Ryan, I got caught long and slammed like you warned, and went through the split.
I held TZA way to long and am way in the hole. Since the Fed MAY taper in September, would you keep holding on a couple more months, or sell before the ship sinks and take the loss? This is a personal web site, reflecting the opinions of its author s. Statements on this site do not represent the views or policies of anyone other than myself. The information on this site is provided for discussion purposes only, and are not investing recommendations.
Under no circumstances does this information represent a recommendation to buy or sell securities. You are using an outdated browser. Please upgrade your browser to improve your experience. TheSlayer's House of Truth I trade every day. I've been trading since the early s and have been in a lot of chat rooms, having run some of them myself.
I am an opinionated cuss, but don't let that put you off, I just like to say what I'm thinking and feeling at the moment. I day trade and swing trade. I have my ups and downs, but I'm always trying to get better. I was mentioned in "Scam Dogs and Mo-Mo Mamas: Inside the Wild and Woolly World of Internet Stock Trading," John R. If you know John, tell him Slayer says Hi. Joined Oct 27, Fri Oct 28, TNA October The highest-reward strategy, in hindsight?
TZA October Well, the optimal strategy for this would have been to sell it at some point during the previous uptrend. Waterlogz October 28, at Vegastrader October 28, at Po Pimp October 29, at JOHN ROSS October 29, at 1: Brenda February 1, at 2: Ryan June 24, at Anthony July 8, at 7: