Investment Strategy Overview

This strategy intraday long and short trades the 3x Semiconductor ETF, SOXL. As a fundamental principle of our strategy, no positions are maintained overnight. This approach is deliberately designed to mitigate some of the inherent volatility associated with these ETFs.


Leveraged ETFs and Risk Mitigation

It is imperative to recognize that leveraged ETFs offer the potential for substantial returns but simultaneously carry a heightened degree of risk, attributable to their 3x leverage. Our approach seeks to mitigate this risk by adopting a dynamic stance that involves holding the long ETF during favorable market conditions while holding the inverse ETF during market downturns. This decision-making process is driven by our machine learning algorithms, ensuring a data-driven and disciplined approach.


Account Requirements and Geographic Considerations

Participants in our strategy should be aware that a margin account is required. We do not employ martingale strategies or margin utilization. In the case of an Individual Retirement Account (IRA), IRA margin is mandatory. Additionally, it's important to note that the ETFs we utilize are not available through Interactive Brokers in Europe.


Account Size and Automation

We recommend a minimum account size of $30,000 to avoid Pattern Day Trader violations. Additionally, we highly recommend using Collective2's autotrading to ensure timely execution and adherence to our algorithmic approach. We emphasize that this strategy should only be implemented with funds designated as risk capital, capital that one is prepared to lose entirely if necessary. Be sure to exercise prudent judgment when setting scaling to align with one's risk tolerance. Our system is entirely algorithmic, devoid of discretionary decision-making.


Suggestion for how to calculate scaling:

1. Find strategy model account value by opening the strategy page.
2. Zoom the chart to the far right, and move mouse over current model account value (e.g., $27,150).
3. Suppose you have $33,000 in your IB account that you want to use in it's entirety.
4. Now divide to get scaling: $33,000 / $27,150 = 1.215, or 121%
5. So you would set your scaling to 121% when setting up autotrading.
6. You may want to choose a lower value to be less aggressive, but we do not recommend a higher value.
7. It is advisable to revisit scaling (yearly is good), and if necessary, update it.