URTY - the 3X leveraged ETF for the Russell 2000 LONG Long

ProShares UltraPro Russell2000Arca

Description

⋅ Jun 7, 2023 3:39 AM

URTY seeks to yield 3X the Russell . The Russell has lagged the other major indices. This is

probably because this is a big collection of small companies which are weaker in general

and more suspectible to financial pressures like to cost of borrowing to finance growth and

so on. This week the Russell is out performing SPY, QQQ and DIA. These leveraged ETFs should

not be traded downside as the 3x causes expotential decay over time. Buy and hold will not

work well.

On the chart, the up trends as tracked by the "alpha trend" indicator are fairly obvious and

substantial. The zero lag MACD confirms buy and sell signals with K/ D line crosses. Entry

points are marked by a dramatic uptick in relative volatility making it easy to buy fast

and early in trend momentum, URTY is up nearly 20% so far in June. ( So much for sell

in May and go away). At present, it is waiting in consolidation waiting for more buyers

to step into its price action.

Comments

zAngus

⋅ Jun 7, 2023 3:45 AM

Thank you for posting your idea and sharing with the community.

AwesomeAvani

⋅ Jun 7, 2023 3:50 AM

@zAngus, Sure I threw in a little education regarding leveraged ETF being hard to trade downtrend but figured it wouldn't qualify on that side since
it was really about a specific instrument and you gave me the correction a little while ago.

zAngus

⋅ Jun 7, 2023 3:57 AM

@AwesomeAvani, yeah. I do like leveraged ETFs tracking indexes. If I was a day trader it would probably be the approach I would take especially with the TQQQ and SQQQ (so you can indeed trade both long and short directions). I hadnt looked at this one so caught my eye being the Russell.

AwesomeAvani

⋅ Jun 7, 2023 4:03 AM

@zAngus, I scalp both TQQQ and SQQQ very often when there is good movement. On thing on day trading is the bid/ask spread becomes important. I have not checked the options bid/ask spreads on URTY as of yet. I generally will not do a trade if the spread is more than 10% Now that QQQ and SPY have daily options with spreads about 1% I use them instead of the leveraged TQQQ SQQQ as it also seems to me that leveraging with options of leveraged ETFs is kind of a double-edged sword if I analyze the direction wrong.

zAngus

⋅ Jun 7, 2023 5:27 AM

@AwesomeAvani, agreed. Good thinking.

zAngus

⋅ Jun 7, 2023 5:28 AM

@AwesomeAvani, I also like that you can get a good hint of direction if you watch the futures before the market opens.

AwesomeAvani

⋅ Jun 7, 2023 5:43 AM

@zAngus, I trade NAS100 and SPY on forex. I will often place opposing trades one long and one short using bollinger bands for stop losses.
I will set a TP of one side at 5X the SL of the other side. ( hedging) one a pair of trades one wins and the other loses no matter what on balance net profit- will often do the same with USDJPY and EURUSD. In the morning I will know winners and losers but have not found the magic to be able to use that to predict the market finding soetimes the regular session is a reversion to the mean of what occurred overnight Ihave nt yet to get into the futures trading itself but am told of the tax advantages of futures may be helpful to avoid short term captial gains tax. One da at a time. I m in a far west time zone and rarely make the morning bell so dont really get to play the biggest momentum of the day. Sometimes scalp price ction coming when the NY lunch ends at 130-145 Eastern time.

AwesomeAvani

⋅ Jun 7, 2023 5:50 AM

@zAngus, right now ES and NW are kind of directionless & so another reason why I may look at IWM and URTY in the upcoming trading day SPY on a daily chart seemed topped out with a lot of wicks outside upper Bolliger Bands means to me - stay away and watch.