The "Triple Accelerator" algorithm is an innovative strategy that adjusts investments based on market trends, but it's important to be mindful of the risks involved, including potential drawdowns. While the results are impressive, careful consideration and understanding are key.
The riskiest part of this strategy would definitely be UVXY, which is 1.5x the VIX. Replacing it with SQQQ (3x inverse Nasdaq 100) would reduce the volatility but also reduce returns.
Above the 200-day moving average (bull market), TQQQ (3x Nasdaq-100) is generally a good idea, but be prepared for the value to fluctuate 3.5x compared with the S&P. For example, if the S&P is down 1.5%, TQQQ would be down more than 5%. If that scares you, then you could switch to QLD (2x Nasdaq-100).
Below the 200-day moving average (bear market), the risk would of course be exactly the same as the S&P since the strategy holds SPY.
Yeah, I actually really liked the TQQQ element, seems very simple yet completely logical - buy when market is trending up and sell when overbought. I feel like often enough simple works best (unless you’re a quant).
But as you’ve said, VIX was the bet I was curious about, might consider as you’ve suggested and simply short the market rather than long VIX to reduce beta.
Thanks for the quick response - super informative! Will be looking out for your future posts :)
The "Triple Accelerator" algorithm is an innovative strategy that adjusts investments based on market trends, but it's important to be mindful of the risks involved, including potential drawdowns. While the results are impressive, careful consideration and understanding are key.
That's correct
Is there anything you’d add to this strategy to improve its accuracy?
It's a decent but volatile strategy as it is.
The riskiest part of this strategy would definitely be UVXY, which is 1.5x the VIX. Replacing it with SQQQ (3x inverse Nasdaq 100) would reduce the volatility but also reduce returns.
Above the 200-day moving average (bull market), TQQQ (3x Nasdaq-100) is generally a good idea, but be prepared for the value to fluctuate 3.5x compared with the S&P. For example, if the S&P is down 1.5%, TQQQ would be down more than 5%. If that scares you, then you could switch to QLD (2x Nasdaq-100).
Below the 200-day moving average (bear market), the risk would of course be exactly the same as the S&P since the strategy holds SPY.
Yeah, I actually really liked the TQQQ element, seems very simple yet completely logical - buy when market is trending up and sell when overbought. I feel like often enough simple works best (unless you’re a quant).
But as you’ve said, VIX was the bet I was curious about, might consider as you’ve suggested and simply short the market rather than long VIX to reduce beta.
Thanks for the quick response - super informative! Will be looking out for your future posts :)
You're welcome! Glad you liked it.