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I’ve developed a day trading system for TQQQ which yields what I believe are good and consistent results. The problem with trading the stock is that it’s around $150 a share and my capital is low. I don’t know a lot about options but I understand that they can yield good profit with less capital investment (I’m aware that the risk is greater too). Take a look at the stats from a sample of ten trading days, and assuming these results are consistent and considering the win/loss ratio of the system and the profit per winning trade compared to the loss of the losing trades, how would you trade this if you had low capital but wanted the biggest possible return without an extraordinary risk? Some type of options trading? Please be as specific as possible so I have a good basis to start my research into the recommendations. Thanks!
Googling TQQQ I see it is a three times leveraged ETF of the Nasdaq100.
You could trade the Nasdaq futures on the CME (symbol NQ, current contract March 2021). For every $1.00 change in price of the index you make or lose $20 on one contract (minimum price change/tick value = $0.25). Or the MNQ which is a micro contract version of the above with a tenth of the leverage/value, so you would make or lose $2.
But I would echo what Xplorer said. Back tests are usually done for a lot longer than ten days and ideally across a range of market conditions. You pretty much traded ten consecutive days last month while the market was building a consolidation range (a largish up day, a couple of large down days, a large up day then indecision and consolidation). Depending on how you have tested you might want to try back testing some more varied market conditions, then forward testing in sim before going live as you say your capital is low.
You do not win as a trader, you just get to play again the next day. If that game doesn’t appeal to you then you should not trade. Gary Norden
No. I'm showing you this sample size as a representative of a much larger testing period. Let's not get hung up on that. As I said, assume that results of this nature are consistent.
How big is your sample size? For something as random as the market, to be statistically significant your sample size should be in the thousands. !0 trades mean nothing.
Assuming this block of trades is representative then you have an edge.
Mathew28 has given you a way forward ....trade smaller, build your account, gradually increase size. Keep us updated.
I was under the impression that futures are expensive and require a lot of capital. I am aware that micro futures are cheaper so with my 3k capital, perhaps micro is the way to go.
You may consider a futures funded account such as Earn2Trade, TopStep, OneUp, etc. There are probably others for stocks if trading TQQQ. You must pass a SIM evaluation round, following various risk management rules and hitting the profit target, after which they will fund you with the capital needed to trade futures/stocks.
