Largely due to the long bullish market run, investors have grown complacent, considering guaranteed investment growth as a given. However, nothing could be further from the truth. Stock market volatility is challenging enough for a seasoned portfolio manager at a Wall Street financial firm. When confronted with decision-making in highly-unpredictable markets, investors may find themselves staying outside of the market or taking uninformed risks.
Wise investors dedicate a portion of their portfolios to buy and hold, with the percentage of holdings determined by factors such as net worth, age, goals and personal preferences related to high risk exposure.
However, there are additional strategies that are designed specifically to profit in “choppy” market conditions. One such technique, the Lock and Walk system, has been used by investors to reap profits in prior markets affected by these types of price fluctuations. This strategy has beat the S&P by 36 percent since 2010. Though, it is always important for investors to remember that past performance is no guarantee of future success.
The Lock and Walk technique focuses on support and resistance levels of the NASDAQ 100 INDEXNASDAQ:NDX. Investors who follow the Lock and Walk technique trade the Proshares UltraShort QQQ QID and the ProShares Ultra QQQ QLD based upon the price’s movement relative to resistance and support levels.
The idea being simple. Purchase near support and sell at resistance. Stop limit out if support breaks. In a nutshell, if the support level is tested, target QLD to sell. If support breaks, sell QLD.When the resistance level is tested, target QID to sell. If resistance breaks, sell QID.This approach does not short sell. However, it does buy short occasionally, creating the potential for gains to the investor when market movement is downwards. Additionally, this is not a buy and hold strategy and should not be used as such.
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Some of the areas of NetPick’s expertise include technical analysis techniques (systems and signals), derivatives (Options, Futures), currencies (FOREX), stocks and exchange traded funds (ETF’s). For full details, visit netpicksllc.com