Trade the TQQQ

Updated: The membership site has been enhanced and updated. Based on further research, I have developed a new TQQQ trading system that offers even better performance. The original system – the TQQQ Trading Strategy – continues to be a strong system and is available for investors who want to set up a system to trade themselves. The new system – the TQQQ Breadth Flip Strategy – is available for investors looking to get trading signals in order to trade TQQQ using a proprietary and effective system.

The Robotic Investing membership site offers access to two systems depending on your subscription level.

Both of them take a high-risk/high reward approach to trading the 3x leveraged ticker TQQQ.

The first is the TQQQ Trading strategy, which is a mean-reversion strategy.

The second is the TQQQ Breadth Flip strategy, which uses market internals to determine the best time to be in TQQQ, and when to go to cash.

Both systems use one of the most volatile leveraged trading instruments to capture short-term mean reversion swings of the Nasdaq 100 index.

I personally trade both systems to grow my retirement accounts.

Traded Assets

Both the TQQQ Trading Strategy and the TQQQ Breadth Flip Strategy use the TQQQ ETF. Depending on the signals, each strategy is either in TQQQ or in cash.

Nasdaq TQQQ

What is TQQQ? TQQQ is a 3x ETF that tracks the Nasdaq 100 index. If the Nasdaq 100 goes up 1% in a day, TQQQ should go up approximately 3%. It never works out exactly like that due to fees and slippage, but it gets close.

The risk is when the same index goes down 1% – the 3x ETF will then drop approximately 3%! That can be hard to stomach. TQQQ is not something to place your whole portfolio into, but can provide huge returns that can quickly grow portfolios.

Risk Management

TQQQ Breadth Flip Strategy

For this system, risk management is handled by only investing in TQQQ when market conditions are prime for an increase in the share price.

Using statistical market breadth calculations in both Amibroker and TC2000, the system gauges how the market is performing to determine when buying and holding TQQQ is optimal, and when going to cash will be the best statistical option.

Due to the way this system works, the additional risk management tools used in the other system are not required – this makes the TQQQ Breadth Flip Strategy easier to trade (i.e. less potential trades).

TQQQ Trading Strategy

The TQQQ Trading Strategy also manages risk by going to cash when conditions are not optimal. The signal to hold cash is different than the TQQQ Breadth Flip Strategy, but is also effective in reducing drawdowns than a straight up buy and hold of TQQQ.

This strategy also manages risk through position sizing.

When the TQQQ is prime for entry, instead of going all-in on a position, TQQQ is bought in 25% chunks. This slow accumulation of shares helps by giving us an opportunity to buy more if/when TQQQ continues to drop after we buy it. Statistically the TQQQ has shown to mean revert higher but not always after the first signal.

By buying in 25% chunks, the strategy is able to take advantage of multiple entry signals that can occur. The strategy provides for four opportunities to add to the position. Sometimes the system will only have a 25% exposure. Other times, it will be 100% invested.

My research shows that TQQQ tends to mean revert, and this strategy attempts to take advantage of that phenomenon, but with a safer and more systematic process.

How Each Strategy Has Performed

The TQQQ started trading in 2010. I have been able to go back until the inception of the ETF and test how each strategy would have performed over the past nine years.

Granted, in backtesting terms that is not a long time. Dual Momentum by Gary Antonacci has results going back to 1950 posted on his website. Given the shorter history of TQQQ, that is what we have got to work with.

What have the annual returns been like for each strategy? Have a look at the results from Amibroker, which I have used to run each backtest.

TQQQ Breadth Flip System

Since May 10, 2010, the TQQQ Breadth Flip System has generated an Annual Return of 34.95%. During the same time period, the S&P500 managed to only gain an Annual Return of 12.67%. Here is what that looks like on an equity chart (greenish plot):

A $100,000 starting investment in the TQQQ Breadth Flip Strategy ended up at $1.4 million versus a terminal value for the SPY of $293,683.

It is very important to note that the ride on the way up has been much bumpier for the TQQQ Breadth Flip Strategy. In other words, the TQQQ Breadth Flip Strategy is much more volatile and can suffer some pretty steep drawdowns. This means that to trade the system, you need to be able to hold through the drawdowns and stick with the system. The losses on the way up are more dramatic than a buy and hold – you need an iron fortitude to be able to handle this strategy.

Maximum drawdowns for the TQQQ Breadth Flip System have been 38%. This is not what the system has lost on a trade, only the largest drawdown from peak to trough through the life of the backtest. As a comparison, the SPY experienced a 19% maximum drawdown for the same period. However, investors who were able to stick with it, would have been rewarded very well.

TQQQ Trading Strategy

Since May 10, 2010, the TQQQ Trading Strategy has generated a Annual Return of 17.03%. During the same time period, the S&P500 managed to only gain an Annual Return of 12.61%. Here is what that looks like on an equity chart (greenish plot):

A $100,000 starting investment in the TQQQ Trading Strategy ended up at $401,000+ versus a terminal value for the SPY of $290.063. Note: The difference in ending values for SPY is due to the fact that one system buys at the open, and the other the close.

Just like the TQQQ Breadth Flip system, it is very important to note that the ride on the way up has been much bumpier for this strategy compared to SPY.

In other words, the TQQQ Trading Strategy is much more volatile than a buy and hold of SPY and can suffer some pretty steep drawdowns. This means that to trade the system, you need to be able to hold through the drawdowns and stick with the system. The losses on the way up are more dramatic than a buy and hold – you need an iron fortitude to be able to handle this strategy.

Maximum drawdowns for the TQQQ Trading System have been 29%. This is not what the system has lost on a trade, only the largest drawdown from peak to trough through the life of the backtest. As a comparison, the SPY experienced a 19% maximum drawdown for the same period. However, investors who were able to stick with it, would have been rewarded very well.


REMINDER: Past results are not indicative of future returns. Robotic Investing and I are neither a broker nor an investment advisor, registered or otherwise. We are neither licensed nor qualified to provide investment advice. We are solely an informational site identifying strategy trade signals using automated algorithmic market analysis tools on a limited set of funds. If you are unable or unwilling to fully read and agree with our Terms of Use and Disclaimer, we ask that you exit this site immediately. Your continued use of this site and/or associated media shall be considered equivalent to your signature as evidence of your acceptance of our Terms of Use and Disclaimer.

What Subscribers Get

There are two membership levels for potential subscribers to consider. The first gives you access to the TQQQ Trading Strategy which will teach you how to set up the system on your own charts. There are no trading signals with this membership level.

The second membership level gives you access to the TQQQ Trading Strategy mechanics, the nightly signals for the TQQQ Trading Strategy, as well as the trading signals for the TQQQ Breadth Flip System. This level will provide you with the signals that generated the huge gains represented above.

Both systems of course come with no guarantee of future performance, and all trading decisions are ultimately yours (sorry, had to say that!)

TQQQ Trading Strategy

  • Step-by-step instructions on how to generate signals for buying and selling TQQQ.
  • Instructions on setting up TradingView, including Pine script.
  • NEW: The system works great if you have a full-time job and cannot watch charts throughout the day. Two sets of instructions are provided to members. The first is instructions on how to use the system to trade with real-time market data to buy and sell at the end of the day (for traders who can watch the markets throughout the day). The second is instructions on how to get the signals at the end of the day, and buy or sell TQQQ at the open of the next trading day (for traders who can’t watch the markets throughout the trading day).
  • An updated list of answers to FAQs as they come in.

TQQQ Breadth Flip System

  • All of the content and instructions included with the TQQQ Trading Strategy membership.
  • Nightly signals for the TQQQ Trading Strategy – no need to set up the charts yourself if you want to trade that system.
  • Nightly signals for the even more powerful TQQQ Breadth Flip System. Every night I will update the generated signals to help you determine if you should buy or sell TQQQ.
  • Full instructions on how to trade the system including when to enter the trades, order types, allocation amounts, when to start, and an overview of the mechanics of the system.
  • A constantly updated list of answers to frequently asked questions (FAQs) as they come in.

These are systems I personally trade, with more emphasis on the TQQQ Breadth Flip system, and I am confident in their ability to grow my wealth. That does not mean you should blindly follow along. However, I am investing for the long-term (10+ years) and can stomach the volatility. If that sounds like you, then please consider signing up!

Ready to Sign Up?

The TQQQ Trading Strategy level is a one-time payment of $39.95 (US). Get full access to the easy-to-trade system that takes advantage of the TQQQ’s mean reversion statistical tendencies.

The TQQQ Breadth Flip Strategy level is a low monthly fee of $14.95 (US). Get access to the nightly signals for the system as well as all other information, including the TQQQ Trading Strategy.

Please head over to the Subscribe page to SIGN UP.