For most European countries this supposed gap doesn't exist.
With CFDs, knock-out products etc. the EMU countries allow to virtually create any leverage
that you want - often with lower commissions and spreads. Just like lev ETFs these other asset
classes are buy-side phenomena, because they attract many undercapitalized and/or clueless
traders while the issuers and other sell-side professionals systematically take the opposite side
of the trade.
For the US, the gap is more of a regulatory issue since risk protection philosophies changed over time.
Most of the above named European products and often even the information about it aren't allowed
for US residents - which is no damage to them imho.
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I have been learning to day trade stocks and came across leveraged ETF's. I found day trading stocks quite difficult because of manipulation but been watching UVXY for days and it has much more cleaner direction. My account size is 100k but I will start really small to gain experience. I am not looking to get rich quick but looking to generate consistent income of $300 and upwards a day.
I have not found many articles for day trading ETF's. UVXY /XIV and has huge volume and liquidity so I am not understanding the issue of slippage on market orders that folks are discussing on the post where you responded. Also, the tax treatment is 60/40 just like eminis.
Day trading UVXY looks easier and I am not sure what is the catch and why I am not seeing a lot of discussion outthere.
Any thoughts would be appreciated. Thank you!!
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Lev ETFs are a classical asset for small accounts.
With your account size, there isn't a single reason to trade lev ETFs:
You can afford either the original ETFs to get the desired postition size for your RM/MM or the more efficient, but higher leveraged futures.
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I like to comment on your suggestion here
"Backtest your method on these ETFs to find out if your method is profitable.
If it is - give it a try.""
while you backtest a set of symbols (from a scan) for last 1 year and now you get diff set of symbols on the same scan,
how would the backtest results of that "symbol set" would it help for a new "symbol set" from today's can
Hope i made it clear
Last edited by emini_Holy_Grail; July 4th, 2015 at 02:19 PM.
Let's make an example: A trader does a daily scan of MACD on the S&P for crossovers. Surely the result will vary from day to day - let's say from 5 to 50 crossovers. Quite normal.
And such results are often the reason why people get lost in backtesting "symbols" instead of methods.
A method e.g. gives you entries, exits (when you are right and when you are wrong) - and above all: an answer to the question "how much?". Especially with portfolios, there's nothing to backtest if the risk management / money management didn't decide which signals to take and with which size(s).
In short: A scan is neither necessary nor sufficient for a backtest
I would just trade single contracts of futures. Mini contracts where applicable. Less HTF noise, no PATD so rule you could take money off the table, try it out with a smaller account size. And you have more ability to scale into good positions due to the high leverage.
The following user says Thank You to DrewDown for this post:
Genuine answer: The trust you can have is totally dependent on your testing methods.
It's fairly easy to make backtested and/or (over)optimized systems look good.
Provided that you avoid classical pitfalls like e.g. using the complete data set for backtesting
or overoptimizing the parameters of your selector, much depends on the backtesting programs.
Most programs out there aren't made for testing, still less for portfolio testing.
So much depends on the program that you choose and on your understanding
of its implementation of backtests. In the end it's the choice between the devil
and the deep blue sea: You either test the programs down to such detail that
you trust the results (which is a PITA) or you write your own backtesting code -
which is also a PITA, but you know exactly how it works.
Most of the traders that I know (including myself) end up with the second alternative.
I code the tests myself and use other code only for absolutely basic tasks (like
Monte Carlo simulation) so that I can be sure that it won't compromise my tests.
Last edited by choke35; July 8th, 2015 at 08:18 AM.
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thks for the explanation
I had a programmer who wrote few strategies for me and I chose the simple one
agree on # of parameters, so I reduced to just "1 parameter" which is the ATR value
beside target and stop value
and the last thing is what data series chart, either 15min or 60min chart
to live with reality of backtestng, I dont expect a backtested PnL to repeat the same in the future, but should give an average, and last thing I do (i am sure we all do) is a basket of symbols to offset some losses
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