Long Bull on Nasdaq
I just started earning two years ago and began investing in Nasdaq, intrigued by the remarkable bull run it experienced over the last decade. The market’s impressive gains sparked a burning question in my mind: could this incredible performance repeat itself? Fueled by curiosity and a passion for coding, I developed a strategy that I believe could be highly profitable during such bullish periods. Now, I’m eager to share my approach and hear your thoughts on its potential.
The results from my algorithm have been nothing short of astonishing. By leveraging Bull and TQQQ (3x QQQ), the strategy aims to maximize gains when it identifies an upward market trend. In bearish conditions, the algorithm switches to one of three scenarios:
Holding cash
Buying gold
Purchasing bearish PSQ (-1x QQQ)
Each scenario has delivered distinct outcomes, with holding PSQ emerging as the top performer during downturns. This flexible approach not only enhances potential returns during bull runs but also provides robust protection and profit opportunities when the market takes a dip. Additionally, my algorithm monitors RSI (Relative Strength Index) strengths and examines the highs and lows of the market on a weekly chart to accurately identify potential market bottoms, further optimizing entry and exit points for maximized performance.
Returns on Each Scenario
1. Holding Cash.
The backtesting results of my algorithm are truly remarkable, as illustrated in the chart above. An initial investment of $100 in 2011 has grown to an impressive $41,717 by 2024 using my strategy. This growth is achieved by dynamically leveraging Bull, QQQ, and TQQQ during bullish trends and strategically switching to holding cash during bearish periods. The algorithm’s ability to monitor RSI strengths ensures precise identification of market bottoms, optimizing trade entry and exit points. The statistics further highlight the strategy’s effectiveness, with 409 positive trades out of 829, an average positive trade return of 4.42%.
Some stats on Holding cash.
2. Holding Gold on Bearish Movements.
The new results for the scenario where the algorithm holds gold during bearish market conditions are even more impressive. An initial investment of $100 in 2011 has grown to nearly $37,990. by 2024. This growth is driven by the algorithm’s strategic shift to gold when the market trends downward, leveraging its stability and value retention. The updated statistics reveal a total of 829 trades, with 440 positive and 389 negative outcomes. The highest positive trade return reached 26.30%, while the average positive trade return was 4.57%. The algorithm’s ability to minimize losses is evident with the average negative trade at -3.25%. Holding gold has proven to be a robust strategy, providing excellent performance and enhancing overall portfolio resilience during market downturns.
Stats on Holding Gold on bearish outlook
3. Holding PSQ ( -1 x QQQ )
The final scenario, where the algorithm holds PSQ (-1 x QQQ) during bearish market conditions, has proven to be the most successful. An initial investment of $100 in 2011 has skyrocketed to an impressive $44,623 by 2024. This scenario effectively capitalizes on market downturns by leveraging inverse QQQ, providing robust protection and growth even when the market declines. The updated statistics show a total of 829 trades, with 429 positive and 400 negative outcomes. The highest positive trade return was 26.30%, with an average positive trade return of 4.82%. The strategy’s efficacy is further underscored by the lowest average negative trade at -3.26%. Holding PSQ has delivered exceptional performance, making it the best-performing scenario out of all three, significantly enhancing the overall profitability and resilience of the portfolio.
Stats on PSQ
Summary:
Over the past two years, my journey into investing in Nasdaq has been both exciting and educational. Inspired by the bull run of the last decade, I developed an algorithm designed to maximize profits during bullish trends by leveraging Bull, QQQ, and TQQQ, and to protect against losses during bearish periods through strategic shifts to cash, gold, or PSQ. The backtesting results have been astonishing. An initial $100 investment in 2011 has grown significantly in all scenarios, with the highest growth reaching $44,623 when holding PSQ during market downturns.
The algorithm’s dynamic strategy, which includes monitoring RSI strengths to identify potential market bottoms & examines the highs and lows of the market on a weekly chart, has proven its potential. By switching to gold during bearish trends, the portfolio also demonstrated strong resilience, growing to nearly $37,990. In the cash-holding scenario, the investment still performed impressively, showcasing the robustness of the strategy across various market conditions.
However, implementing this algorithm in real-world scenarios introduces challenges, such as dealing with the spread between buy and sell prices and ensuring timely trade executions. These factors can affect overall performance, highlighting the importance of continuous testing and optimization.
Looking ahead, there is a positive outlook for further enhancement of this strategy with the upcoming introduction of 4xQQQ in the market. This new leveraged option could offer even greater profit potential during bullish trends.
To bring this strategy closer to real-world application, I have started testing it with paper money using Alpaca. I am committed to sharing the ongoing results and insights as the testing progresses, providing a transparent view of the algorithm’s performance in a live trading environment. Stay tuned for updates and join me in exploring the exciting possibilities of algorithmic investing in the Nasdaq market.
