Posted by traderrandy on 15th of Mar 2011 at 03:06 pm
Has anyone traded "NUGT - Direxion Gold Miners Bull 2X" as a
substitute to GDX in the GDX Mechanical System? If so, I am
curious of your results and/or success with this.
traderrandy - I covered this topic before. Generally I
advise against it because while your gains could theoretically be
double, so will your loses.
Also think about this, the GDX system uses an 8% stoploss, which
is already kind of large for my personal tastes. However with
a 2X ETF it would have to be 16%! that's too big for most
people. You have to think in these ways when
trading.
Also do a search on the blog for DUST and GDX, it's been
discussed before
Posted by frtaylor on 15th of Mar 2011 at 03:19 pm
Actually I have to use DUST in my IRA since I can't short. I buy
exactly 1/2 the dollar amount I would have sold short of GDX. And
yes, 16% stop loss. But the position is half the size and so far
I've been able to handle it. The other alternative I've tried is
buying puts, but didn't like that due to degradation. (Though there
is degradation w/ any 2x etf as well.)
Question?
Posted by traderrandy on 15th of Mar 2011 at 03:06 pm
Has anyone traded "NUGT - Direxion Gold Miners Bull 2X" as a substitute to GDX in the GDX Mechanical System? If so, I am curious of your results and/or success with this.
Thanks
traderrandy - I covered this
Posted by matt on 15th of Mar 2011 at 03:16 pm
traderrandy - I covered this topic before. Generally I advise against it because while your gains could theoretically be double, so will your loses.
Also think about this, the GDX system uses an 8% stoploss, which is already kind of large for my personal tastes. However with a 2X ETF it would have to be 16%! that's too big for most people. You have to think in these ways when trading.
Also do a search on the blog for DUST and GDX, it's been discussed before
Actually I have to use
Posted by frtaylor on 15th of Mar 2011 at 03:19 pm
Actually I have to use DUST in my IRA since I can't short. I buy exactly 1/2 the dollar amount I would have sold short of GDX. And yes, 16% stop loss. But the position is half the size and so far I've been able to handle it. The other alternative I've tried is buying puts, but didn't like that due to degradation. (Though there is degradation w/ any 2x etf as well.)
nice response frtaylor, thanks for
Posted by matt on 15th of Mar 2011 at 03:20 pm
nice response frtaylor, thanks for the post to help out. Yes that's one way just cut the position in 1/2 to have the same risk
As long as we're on
Posted by frtaylor on 15th of Mar 2011 at 03:28 pm
As long as we're on the subject, I expect we'll have a GDX short email notification here momentarily, right?
thanks matt i'll search for it
Posted by traderrandy on 15th of Mar 2011 at 03:17 pm