I have been posting the systems returns as if one had traded some medium tracking the spx. But I have noticed that the rut has been much more volatile than the spx, so I have been trading a portion of my portfolio in funds etc. that track the rut. for example if last week you had traded the rut using the systems calls you could have netted roughly 11.25% gains vs. 5.90% for the spx. If you had traded something with more leverage such as 2.5x direxion funds or maybe 3x etf's you could have netted maybe plus 20% by staying fully leveraged instead of varying your exposure as I have posted.
Of course if the system had an off week then most likely trading the rut would incur larger losses. This is part of the dilemma of forecasting the market. To have great returns it would help to have a good system and also be able to predict when that system will be hot and when to back off. Not an easy task to say the least!
I have found the SP500 to be the most consistent index large cap - with some mid cap, diversified, etc)
ReplyDeletefor trading. Also, more traders focus on SPY than IWM. For a trading vehicle, I prefer end of day only SP500 index mutual funds, ..Profunds or Rydex. Thanks.
Regards, Jim
As of late, the small caps have been tracking the large caps, but with larger moves. If I feel confident and want more leverage then it is useful to do chart comparisons to see if different indexes are correlated and which is more volatile.
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