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

Active Trading
#21

That point of time is now. Had you bought at the peak at the end of August, you would still be holding now 4 and a half months later. Say 1 CFD costs $2.50 to hold per night and there is 128 days from September 1st to today, that is $320 dollars in interest. It could be many many months more before you make that interest back, plus profit. Keeping in mind that interest will continue to build up nightly.

Sometimes it’s better to cut your losses and start over. I have about 90 to 95% success with the simple rules I set myself outlined above. My losses were all intentionally taken for the reason I just gave - sometimes it’s quicker to cut your loss and make the gain elsewhere, rather than be patient and wait for the stock to rise.

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#23

It’s the same principle and judging by your comments on here you are really trying to find a way for this work, the only way this will ever work is if the stock bottoms and you somehow manage to buy the bottom and then the stock has a 20% gain in the next month (give or take). Otherwise if you buy the stock and it doesn’t move/you buy the top you are screwed.

#24

But the way you describe it “you are really trying to find a way for this work”. As I said before I have done that many times before without leverage. My success rate is 100% sofar. And do not forget we are talking about megacap stock MFAANG.

The return is not great like the one I have with EV individual stocks, or other growths Chinese stocks but the risk is much lower with Mega caps stocks.

#25

I’ll show 2 examples.

Amazon from Sept 2018 to Sep 2020…
MSFT from Dec 2008to July 2013…

Whats your plan for when you’re not investing in a RAGING bull market…?

msft
msft1574×951 287 KB
amzn 1
amzn 11582×934 275 KB

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#26

The same strategy. So do not sell it at loss. Find the best possible entry during the dip, The dip not because of fundamental change. You might want to combine it with Dollar Cost Averaging (DCA). I also have S&P 500 Index fund that I keep it in my SIIP and never sell it to catch the continues growth of this stock. The problem index fund here is that they buy it when it is at long time high. You will not be getting the benefit when the mage caps stocks are making the dip because of the sentiment in the market (not fundamental change in business).

Show me in the chart above in which point this strategy does not work.

Keep in mind we are just talking about Megacaps, we do not include when they have not turned to become a mega cap stock.

The risk swing trading with megacap stock is very low as the risk they go into administration is almost nil. And they keep growing. We are not talking about the return you would have got with penny stocks or other high risk growth stocks. When it is not bull market the return is lower, but you could still do it, it is only that it is probably better to divert it to another stocks as the opportunity cost is high.

#27

Leverage and non-leveraged stocks don’t act the same! Just because MSFT will go up 1% doesn’t mean the 3x will go up 3%. I linked an article showing you a few examples.

You obviously haven’t taken in what anyone has said to you. Good luck when the market consolidates or starts to go down.

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#28

"@Zerr. Just because MSFT will go up 1% doesn’t mean the 3x will go up 3%. I linked an article showing you a few examples.

Well you are refering and also your link is about leveraged ETF, but I am refering to individual share is leveraged not ETF, so the complication of how the index is calculated is removed from the Equation.

It is explained it here:

“For example, if Amazon.com Inc. rises by 1% over a day, then the ETP will rise by 3%, excluding fees. However, if Amazon.com Inc. falls by 1% over a day, then the ETP will fall by 3%, excluding fees.” That is what I said before.

#29

Basic maths says no and fees are gonna eat you alive.

Just do us all a favour and only try 50 pounds in non-leveraged amazon and 50 pounds in a leveraged Amazon and you will see why it will not work.

They want you to buy it to pay in fees, if it was this easy then why are the professionals not doing this huh?

(i will no longer be replying to this, good luck)

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#30

Well, It is the same thing with CFD, you always need to pay the fee for leverage product. The same thing you are taking Mortgage, to leverage your buying power for purchasing power, you will need to pay the interest for that.
Otherwise, how do they make money, also how do they len people money or lend people share? But you get leverage with it

They mention it clearly “excludng fee”. Everyone with basic math knowledge could see that without need to be explained that it will not be exactly the same without buying share without leverage.

Professional fund manager does not need to buy with leverage as they have enough money to buy without leverage so also to avoid the fee.

#31

There are some factual errors on that page you link to from a provider of leveraged ETPs eg implying that you can lose more than you in with CFDs.

I’m not sure why you think a leveraged ETP on a single share is less risky than a similar product on an index. With single shares there is still a rebalancing mechanism (see the recent threads on Granite Shares Rolls Royce ETP to see how positions can be wiped out pretty quickly).

If you read about decay due to fees and daily rebalancing I suspect you won’t want to hold these type of products for more than a day or so (which doesn’t really fit with my understanding of how you’re investing at the moment).

TL:DR ETPs are significantly more risky than what you are doing now and won’t deliver a simple 3x multiplier of share price.

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#32

Thanks about this info really appreciated. I will have a look on this.
About the fee is clearly stated on the KPI. Also eveyone is aware that you will need to pay the fee for any product. But I have not seen anyone is mentioning about the need for balancing and rebalancing mechanism in the previous discussion similar to what leverage ETF is doing.

Balacing serves a purpose for index fund, but I wonder why there is a need to balance or rebalance mechanism if it is just an individual share is leveraged.

I will have a look on Granite Shares Rolls Royce ETP.