Swing Trade Megacap (MFAANG) stocks with Leverage, Your opinion Please!

Active Trading
#1

There are a few Megacap STP Stocks (MFAANG) with 2-3x leverage. For instance

3x Microsoft

3x Facebook

3x Amazon

3X Apple

(The FAANG Gang Had a Day)

I have been swingtrading these stocks but without leverage, and my success rate is 100% sofar. I never sell it when they are in red. I will wait until they turn green even it will mean waiting for a few months. It is only that the opportunity cost is high. So, I will try to up the game by playing with leverage. Another advantage here is that it is priced in ÂŁ.

IMHO swing trade these stocks is vey low risk as the long history has shown that if there is a dip they will “always” bounce back” sometimes very very quick as long as the cause of price drop is not fundamental issue in business. In many cases the issue is just about sentimental and more political rather than business such as activists try to disrupt the capitalism, monopolists etc. If the issues like this they will easily bounce back. Also, these stocks have been tested in the extreme environment and they will bounce back. Just have a look in the March crash, they are a few stocks than bounce back very quick.

Has anyone tested this strategy? Would anyone who have tried this strategy especially with leverage, share his/her experience?

#2

never tried it, leverage is just gambling, you could just be in a deep hole before it bounces, without the leverage sure you can hold on until it recovers but I don’t think should hold leverage overnight really

buy and hold is the best and I’m up quite a lot on those megacaps with that strategy.

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#3

If you understand how it works they are less scary. I have traded leveraged shares for a few months now, with 90% success rate.
One time I got burned was when Granite Shares Short Rolls Royce played a trick on us, so I stay away of Granite shares nowadays.
Intraday Reset mandatory read:

GLTA

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#4

Yes, your insane. Your not swing trading if you buy and wait for something to go green…!?
History tells us in fact that every market leader eventually tops and crashes never to see their highs again.

A good bear market could see these stocks take years to reach back to highs if they ever do again after a crash. The last 6 to 9 months have been an insane bull run, you really think its just that easy and that an apparent 100% success rate is sustainable!? Lmao. How about the last 6 months have infact been running up stocks that are now pricing in the next 3 years growth…? Yes of course they can go higher still, but no, they won’t go up forever…
Your basically buy and holding…

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#5

Thanks for the answer, I could see this as a very valid point. But I think it will need to differentiate between swing trade a Megacap stocks (E.g MFAANG) and other stocks such as penny stocks. I am particvularly talking about Megacaps stocks not other stocks. such as penny stocks.

With penny stocks it might even get delisted. With Mega caps stock the risk is very low as they always bounce back even after the market crash sometimes very quick.

#6

Minus 100 points to you for not using the acronym FAGMAN

#7

I hate when people say this. You do the exact same analysis on stocks, trends, markets etc. when working with leverage as you do with investing. Just because you’re working with leverage doesn’t suddenly negate this. Leverage just gives you more buying power. It’s the investors responsibility to ensure they don’t get so far in the hole that they get margin called but that’s fine too, it’s just one other thing to think about.

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#8

Every people do that when taking mortgage. With mortgage you are actully using a a leverage with the help of your bank to let you buy home. The risk also you might be losing all of your money once you do not keep the payments as the lender will sell your house.

Otherwise you have to buy it outright without mortgage.

#9

I’ve never thought of it like that, you’re right.

For what it’s worth also, the strategy you are talking about above is one I stick to and have had success with. I checked my stats at the start of December and 90 out of my previous 100 trades were green. In July I checked and 95 out of my previous 100 trades were green.

I follow the rules you described:

  • Don’t sell when red
  • Buy big market cap stocks only

In addition:

  • Don’t over-leverage
  • (personal one) Don’t short as stocks generally do go up
  • Keep backing winners. I play the same 10 stocks over and over.
  • Don’t buy into hype stocks. By the time you hear about them on WallStreetBets or the news, it’s too late.
  • Buy the dip

The only time I’ve sold for a loss is when I run out of patience and it’s quicker to re-gain my loss by trading rather than waiting.

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#10

I have done that many times in the past with Megacaps stocks without leverage. My success rate is 100% sofar.

The drawback of this strategy is the opportunity cost as if you buy stock say like Amazon, buying just one Amazon stock for instance you might tie $3,322 for a few weeks doing nothing before making profit. For that reason it is good to leverage it.

We might be using that in more lucrative trading such as SPAC which already have a DA but the rpice is still near NAV. But certainly, with higher risk.

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#11

Don’t stop! Keep doing it. (that’s what she said)

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#12

I use CFDs for this reason. But then you have to be conscious of overnight fees, spreads etc.

#13

I would not swing trade with leverage. Lets say one swing is 1-3 months. Leverage will just eat up much of your gains with the little corrections along the larger swing.

Disclaimer: I have only read about it, I am a value investor and only marginally interested in trading

#14

I wouldn’t swing trade that long either just to my impatience though.

#15

You have to understand how % work

This has some great examples on why it won’t just 3x your account.

1 Like
#16

Thanks, Noted, to take into consideration. But this is not and index ETF, this is individual share is leveraged, so the complication of how the index is calculated is removed from the Equation.
So when 3x leverage, when the return is up 3% you will get 3x3%=9%. If down 3% you will be down 9% of your position. It is only that if you are down 33.33% with 3x leverage it will wipe out all of your positions.

It is explanied it here.

Is my understanding correct?

#17

Dude, buying and waiting for something to turn green only works in a bull market and is not swing trading. The overall market has been very bullish for the last months. Of course your MFAANGs are green…

I would be very careful using cfd (leveraged stocks) if I were you. Leveraged stocks over long periods of time eat up a lot of your return as well!

No offense intended, just my opinion, have a good year bro

#18

Could you name some of ur winner stocks please. I have tried WIX with great success

#19

As I said, I play the same stocks again and again. Usually:

Cloudflare,
Datadog,
Digital Turbine,
Microsoft,
Visa,
Mastercard,
NVidia,
AMD,
Fastly,
Square,
Peloton,
Pinterest,
Logitech,
Proshares Ultra QQQ.

#20

As I mention previously, I have been swingtrading the Mega cap Stock FAANG, and Microsoft many times. My success rate sofar is100%. The only drawback I could think of is the opportunity cost

Just take for example Amazon (AMZ), show me at any point in the chart below where this strategy does not work. Also it could be combined with Dollar Cost Avareging (DCA). It even works in the most severe environment such as market crash in March. In market carsh in March it took them about two before reaching long time high again

As long as you do not sell it, you will never lose money in many cases the waiting time is just 1-2 months.
Of course, the point of entry during the dip is very important, but you do not need to catch the the very bottom, as to do so is almost impossible. But you get it 60% right (say) you are already better off.

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