Eight leveraged ETFs made the RSI(2) screen this evening. They are here, in order of largest to least volume.
USD and ROM also made the screen, but I got tired of making charts.
I still have more testing to complete for this strategy, but the results so far have been robust. Therefore, I will likely buyÂ 5K of QLD, SSO, DDM, UWM, and MVV, in theÂ morning.Â This position sizingÂ will leave 50% cash left in the account I am dedicating to mechanical trading.
Should you decide to give this strategy a try, beware that without stops a drawdown of over 30% is possible. However, the system recovers quickly. ThisÂ fact, coupledÂ with the high win ratio, makes it easier for me to accept the inevitable large drawdown.
Also, I will be selling 300 SDS, bought at $55.26 average, in the morning as the exit trigger has hit. I am approximating a 2 pointÂ / ~3.5% gain from the trade.Â This could go more in my favor if we gap down at the open. The trade would have had a better gain had I not jumped the gun and bought 1/3 a day too early.
This morning, I sold my QID, for a .23 cents loss. This position was also purchased a day too early, or it would have been very profitable.
Finally, from the “Great Minds Think Alike” category, Dogwood has this evening published a similar post on this strategy.