Leveraged ETFs (3 Aug 11)

Leveraged ETFs (Crossover)

You like a short moving average because it responds quickly to new conditions, and you like a long moving average because it reduces errors.  So why not use both of them?  When the shorter moving average crosses the longer moving average on the upside you buy.  When you use the EMA-5 and EMA-20, you’re charting a one-week moving average against a one-month moving average.  You sometimes see a moving average crossover referred to as a breakout.

ProShares UltraShort Oil & Gas (DUG) $28.72

ProShares UltraShort QQQ (QID) $51.15

The two moving average crossover is more reliable than the single moving average in that it is less sensitive.  It lags more, but is wrong less often.  You’re swapping risk for return, as usual.

All positions displayed are for educational purposes only and are not intended to be recommendations.