Out of interest, I did an exercise using the SPA3 Investor ETF signals for QQQ on TQQQ to compare the results (see attached). Instead of buying or selling QQQ based on the signals generated by SWS, my back test would buy/sell TQQQ.
Using a cash balance of $10k, for each entry trade, banking the profit/loss and repeating the next trade using only the $10k on the next signal resulted in a substantial difference in return over a 3 or so year period. I know this is not a sound trading strategy as the dynamics triggering signals for QQQ are different to that for TQQQ, but the difference in results is impressive.
While the gains from TQQQ are impressive, so too are the losses amplified: -21.97% drawdown on TQQQ vs -7.32% on QQQ which is in line with the leverage offered through TQQQ. In terms of SORR, SPA3 Investor still provided protection with only 1 trade between Dec 2021and Jan 2023.
I’m aware my sample time period is too short to really make a final conclusion as to whether this would be a good strategy or not. Having said that, would the difference in results if SWS had signals for TQQQ be all that different?