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TME 031: 1987 Stock Market Crash

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I remember eating with the family as a child. The news was on and they were talking about the stock market. My dad had money in the market so he was listening intently. The year was 1987 the date was October 19 and it was a Monday. It is also known as Black Monday. The crash began in Hong Kong then spread to Europe and then to the United States. The Dow Jones dropped 22.61%. The crash of 1987 was not the worst crash in history but it was a biggest one day percent loss in the history of the Dow Jones Industrial Average.

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TQQQ

What is the TQQQ ETF?

TQQQ is the symbol for Pro Shares UltraPro QQQ. The ETF seeks to return 3x the daily performance of the NASDAQ. So if the NASDAQ goes up 1% the ETF seeks to move by 3%.

 How does TQQQ work?

TQQQ is a leveraged ETF. Leverage ETFs use financial derivatives, futures, and debt to amplify the returns of the index that it is trying to match. It can be a good choice for trending markets but might not do as well in swinging markets. It is a good way to get more leverage in your trading.

If you use ETFs in your trading system you might want to add TQQQ to your list of symbols.

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Trend Trading TQQQ

Trend Trading TQQQ

Trend trading is a strategy that tries to profit from market trends.  In the past it has been used by the CTA industry to trade futures. In today’s time people have begun to use this strategies on stocks and ETFs.

One of the main components that help the success of trend trading in futures is leverage. Leverage allows a person to buy more than their account value to maximize gains. With stocks and ETFs the maximum leverage is much lower than futures contracts. While this maybe a good thing if you are trying to minimize risk it is bad if you are trying to maximize gains. To maximize gains leverage might be needed depending on your goals.

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