Dear C2 community members,
A few days ago, I received a question asking that if your system only traded long TQQQ, how could it survive in a bear market. Recently I had a trade which turned a bad entry into a winning trade. This trade bought 200 @101.46 TQQQ on 1/23/2020 and it sold the last 100 @98.67 on 1/29. The first buying price was higher than the last sold price; however, this trade still made $141 after fees. The system scaled in positions of 400 shares on 1/23, 1/24 and 1/27. The last buying price was 91.72 which was close to the lowest price on 1/27. It scaled out positions at prices 93.18, 95.20, 97.33 and 98.67 in the span of three days. The last 100 shares were sold at a price of 98.67 which almost reached the highest price of 98.96 on 1/29. Here are the details of this trade (you can also find them in the trade details of system Synthetic TQQQ).
Though there may have been a little luck involved in this specific trade, it demonstrated how a long-only strategy can still be profitable in a bear market. Synthetic TQQQ is a long-only system that only trades one ETF, TQQQ. This system is designed for non-marginable accounts such as IRAs and 401ks. This strategy is comprised of a mix of trend following and mean-reverting strategies. In a bear market, the trend following strategy will not generate long positions, i.e. filtered by momentum indicators. For the mean-reverting strategies, it will try to buy at low and sell at high with different parameters for a bear market.