Update: TQQQ Trend Following August 2018
Rules-Based Strategy Update: TQQQ Trend Following August 2018
The TQQQ Trend Following system is a modified buy and hold system that uses a 3x leveraged ETF that tracks the Nasdaq 100 (QQQ). The Trend Following component means that the system will buy and sell TQQQ based on where QQQ trades in comparison to its moving averages.
Since this uses a leveraged ETF, the system has a higher degree of risk. However, by using trend following principles the risk is managed to a more appropriate level. That said, there may be times when the system goes into a big drawdown before the end of the month, which means that having some intestinal fortitude to hold through those periods is important.
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TQQQ Trend Following Rules-Based Investing
This portfolio trades based on specific rules that tell the investor when to buy and sell TQQQ. Here are the rules of the strategy:
- Buy TQQQ when QQQ closes above its 3-month moving average
- Sell TQQQ when QQQ closes below its 10-month moving average
- Re-buy TQQQ when QQQ closes above its 3-month moving average again
Again, this is a riskier strategy but has provided solid returns in the past. Using the market filter lowers drawdowns (see more in this post: TQQQ Trend Following).
Monthly Signals: TQQQ Trend Following
Each month I generate the signals for the portfolio using TC2000. If you want to give TC2000 a try in order to generate the signals for the strategies on Robotic Investing, then use this link for $25 off.
There is no change for August 2018 – the system continues to hold TQQQ.
Using the chart in TC2000, it is easy to see that the QQQ is trading above the 10-month moving average on a monthly chart:
Strategy Tracking & Performance: Supercharged Index Investing
Here is the portfolio tracker and performance chart for TQQQ Trend Following. The Morningstar Portfolio Tracker is used to track all the systems at Robotic Investing. As you can see the strategy performed better than the S&P500 over the month.
Each of the portfolios tracked use a hypothetical $50,000 starting value. This portfolio was started on July 2nd, 2018.
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