TQQQ: better than 2 C2 systems?

I am a subscriber of AI TQQQSQQQ by QuantTiger for a few months and this system has given me 36,2% profit until now, without including the subscription fee. Since this was a test with a small amount I let it run more or less without much oversight, but now that 9 months have passed and that in the last weeks it seems that it is getting quite erratic in the way it trades, I decided to give a better look at the system.

Starting with 10.000USD, and taking into account the subscription fees, it seems that in terms of pure profit, just buying and holding TQQQ would have been better. AI TQQQSQQQ reduces the standard deviation (softens the ups and downs) at the cost of less profitability. TQQQSQQQ by ETFCapital performs even worse than NASDAQ!

Month Nasdaq TQQQ AI TQQQSQQQ TQQQSQQQ NASDAQ TQQQ AI TQQQSQQQ TQQQSQQQ
Mar-20 10.000 € 10.000 € 10.000 € 10.000 €
Apr-20 15,45% 46,43% 10,60% -2,50% 11.545 € 14.643 € 10.927 € 9.633 €
May-20 6,75% 18,64% 13,50% 0,90% 12.324 € 17.372 € 12.266 € 9.599 €
Jun-20 5,99% 18,00% 16,50% 2,00% 13.063 € 20.499 € 14.150 € 9.668 €
Jul-20 6,82% 22,24% 17,40% -5,30% 13.953 € 25.059 € 16.472 € 9.042 €
Aug-20 9,59% 35,17% 27,90% 8,00% 15.292 € 33.872 € 20.914 € 9.636 €
Sep-20 -5,16% -18,88% -9,80% -7,30% 14.502 € 27.477 € 18.756 € 8.821 €
Oct-20 -2,29% -10,27% 11,80% 14,80% 14.170 € 24.655 € 20.835 € 9.989 €
Nov-20 11,80% 34,53% 33,50% 0,20% 15.842 € 33.168 € 27.655 € 9.889 €
Dec-20 5,65% 15,05% 10,30% 2,20% 16.738 € 38.160 € 30.371 € 9.984 €
Jan-21 1,42% -0,47% -1,90% -0,60% 16.975 € 37.981 € 29.676 € 9.804 €
Feb-21 0,93% -1,38% 9,50% 6,40% 17.133 € 37.457 € 32.364 € 10.304 €
Mar-21 0,41% 2,29% 6,60% -0,80% 17.203 € 38.314 € 34.372 € 10.103 €
Apr-21 5,40% 17,97% 19,20% 13,10% 18.132 € 45.199 € 40.828 € 11.291 €
May-21 -1,53% -4,71% 10,80% 28,20% 17.855 € 43.070 € 45.105 € 14.321 €
Jun-21 5,49% 19,41% 14,40% 11,10% 18.835 € 51.430 € 51.462 € 15.777 €
Jul-21 1,16% 8,36% -4,90% 12,00% 19.054 € 55.730 € 48.827 € 17.536 €
Aug-21 4,00% 12,62% 7,60% -10,50% 19.816 € 62.763 € 52.408 € 15.587 €
Sep-21 -3,57% -6,15% -16,80% -10,80% 19.108 € 58.903 € 43.504 € 13.797 €
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Hey that’s a neat graph and I appreciate that out of 700+ systems you found mine special enough to feature.

Retrospectively, TQQQ is better than any of the systems listed here on c2 and not just the two systems. Returned over 50% p.a. over 10 years! (with a maxdd 70% last year).

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The easiest way to trade TQQQ is to buy when it sells off 20%+ for a recent high. Just don’t put all your capital in it, you never know what can happen to the leveraged product on a big downturn. Also you have to be aware and accept the wide price swings.

And that’s the dirty little secret, buy and hold outperforms everything over time, there’s no need to pay for any of these systems. Why did you let the cat out of the bag!!

But where these systems come into play is when trying to avoid a bear market which could prevent a 75% type loss or to try to minimize drawdowns that would prevent investors from freaking out and abandoning their position.

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And that’s the dirty little secret, buy and hold outperforms everything over time, there’s no need to pay for any of these systems. Why did you let the cat out of the bag!!
But where these systems come into play is when trying to avoid a bear market which could prevent a 75% type loss or to try to minimize drawdowns that would prevent investors from freaking out and abandoning their position.

Great point! Very few systems/people can beat the markets they are trading consistently over years and years in terms of total returns. Typically “outperformance” is either temporary or is due to comparison to a less aggressive market. For example, comparing my system or any system that typically uses 3 times leverage to the S&P 500 isn’t really a fair comparison as a stand-alone benchmark.

My personal focus is on being more aggressive than the standard market (S&P 500) while keeping drawdowns within my tolerance. If I was challenged to beat the S&P 500 in terms of total returns and my only options were to either hold cash or the S&P 500 I highly doubt I could do it consistently for 10 plus years. I think I could reduce the drawdown but not beat the total return.

If the game is instead to use multiple assets, leverage, and keep the maximum drawdown to be less than the S&P 500 I have a really really good shot.

However, one of the components I trade in retrospect is likely to beat my strategy over any period, just like some component in a diversified mutual fund is likely to beat it. Hindsight is 20/20.

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I just would like to add, my system(TQQQSQQQ) handled the bear of Feb20 flawlessly but performed lack luster after that for several months.
But let’s say next bear market I turn a profit & I am more aggressive after the bear, then a system vs. buy & hold would be FAR superior. That’s my goal on the next go round.

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I think it’s only fair that I also analyze the entire life of TQQQSQQQ system, so went back to excel.

Given that I only have monthly returns for NASDAQ and TQQQ, I think the actual drawdown might have been higher, but in any case it give us an idea of how bad it went.

TQQQ drawdown: 49,1%
TQQQSQQQ drawdown (from C2 data): 26%

TQQQ profit: 328%
TQQQSQQQ profit: 135%

TQQQ Profit/DD: 6,7
TQQQSQQQ Profit/DD: 5,2

So, in hindsight, investing 6000USD in TQQQ (buy and hold) would have resulted in the same profit as a 10000USD investment in TQQQSQQQ. Though, the TQQQ ride would be more prone to a heart attack, with 2 drops of 4000USD, representing 49% and 27% of the account. As a reference, TQQQSQQQ had only one drop of 6200USD, representing 20,85%.

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