By the end of this video, you will have a complete understanding of how to successfully trade leveraged etfs. The analogy that I like to make with these is basically like taking a cat if say, you have a house cat and spiking its food with, say, caffeine or an illicit drug That's against Youtube's monetization policies. What would happen is that your wants stable, boring house cat is now bouncing back and forth across the room, meowing and yapping everywhere, and twitching from ear to ear. In other words, little whisker man is very excited, and this perhaps makes the cat more fun to play with, but it's also substantially more dangerous for the cat.

So the leverage ETF basically works in the same way it takes an underlying asset and it multiplies its movements extensively. This allows you to have fun with the fluctuations, but it also comes with some drawbacks. One of the most notable drawbacks is of course, the decay factor because of the multiplication effect of a leveraged ETF and up decaying over the long run. But in any case, the leveraging multiplication effect is very beneficial for us.

This is because as traders, we need the volatility to trade off of enemies often provided in slow markets as well as of course in more fun markets. But we also want some level of consistency. and one of the biggest problems that traders have is that they have a hard time being consistent trading a bunch of different stocks and a bunch of different ETS and a bunch of different sectors. but using Leveraged ETFs generally allows a lot of people, especially beginners to provide that original consistency in growing their accounts.

So with that being said before, I get more into it all. I ask in return for spiking your house cat is that you hit that beautiful and astounding like button. And also don't forget to subscribe if you see value in the following video. So the leveraged ETF is an important tool because it dramatically increases the percentage return we can get compared to trading the regular underlying.

ETF If you wanted to trade S Py or any other SP 500 index tracker, but felt that the movements were too small, the trade off of you could instead trade a leveraged ETF heard of it like you PR O, which multiplies the movements of the S&P 500 by 3. That means if S Py goes up by one percent, you pro goes up by 3% and if S Py goes down by one percent, you pro goes down by 3% That is basically leveraged Etfs in a nutshell, but another technical benefit that most leveraged Etfs have is the ability to trade the inverse. For example, if you want to trade natural gas, you have the option of trading leveraged Etfs such as you Gas and Des You guys multiplies the movements of natural gas by three and D gas is the inverse and that multiplies the movements of natural gas by negative three. So if natural gas goes up by one percent, D gas goes down by three percent.

and if natural gas goes down by one percent, D gas goes up by three percent. So in this way, you guys and B guys are sort of counter parts ones the inverse of the other. But the beauty of this is that it allows you to take a bearish position on a trade without having to go through the process of actively shorting a stock through your broker. But the value with this is that a lot of these tend to move in a much more consistent rhythm as compared to trading, say, individual stocks.

I'm going to compare and contrast these at the end, but let's first dive into how to actually trade them. So to start, what are the best? ETFs To trade? Well, this rotates of course, based on what time of the year and what type of market condition were in. But take natural gas. for example, natural gas tends to be more volatile during October through December.

But generally speaking, you are going to what to focus on the ETFs that provide at least a decent percentage of volatility per day. If you pull up the watchlist pin to the top of the zip trade a circle facebook group, you could see the ETF that I'm focusing on during that current time period. But the first great example I'm going to give is Gush Gush Trax and Leverages Oil and Gas and is quite a good time because of the fact that it provides us the bouncing pattern that we love to trade off of. Taking entry points is always a game of upward versus downward potential.

Though, if you were to take a position at support, you can further increase your odds of success by making sure there is a lot of longer upward potential. This is a good example of longer upward potential. However, it should be noted that long-term upward potential as leveraged Etfs isn't the same as it is with trading stocks. This is because ETFs have a long-term decay based on the multiplication effect which systematically pushes it down in the long run.

This is something that trips up a lot of people, but it's actually pretty easy to explain if you have a $100.00 ETF that goes down ten dollars or ten percent and a leveraged version of that that multiplies it by three times. That goes down $30 or 30% because that's three times after the dip. If the regular ETF returned 10% that regular ETF would now be in 99 dollars. But deleverage ETF that multiplies the movement.

If it returned the 10% that means the leveraged ETF would return 30% and 30% would only put it at $91 So now we can already see a decay and a disparity between the two. So this in effect leads leveraged Etfs the decay over the long run. but that isn't something that you need to worry as much about in the short term. Nonetheless, a lot of folks don't realize this and then just sort of hold and hope, but the odds of success go down every single day that you're holding it because of the simple fact that you do have a decay in the long run.

Okay, so Lab U and Lab D also provide a decent amount of volatility. The sell-off pattern on Lab you can be taken advantage of with its inverse Etf Lab D allowing us to buy any conformation and write the price strength over the SMA line. We also have a comeback pattern of over blind and over selling, which allows us to buy in near oversold entry points and sell out at overbought. This uptrend gives us the overall upper direction, which is important for improving our odds of success.

On the flip side, Lab D also provides the comeback pattern, but doesn't have the direction pointing us in the correct way. The reason that I mention this is because on some days we'll see Lab you having the correct direction and on others will see Lab D having it. The beautiful thing about having an inverse Etf pair is that we can easily take advantage of any movement. Okay, so let's go over Jayna now.

Jane Dog multiplies the movements of gold the gold miners etf by three times. This is excellent because it not only has a pattern of running over the SMA line, but also has a pattern of over binding, over selling, and the running over the SNA line is important because it allows us to buy in at conformation and write the SMA line up and then sell out at validation. This allows us to not only enter in with the RSI on our favor, but also to grab better entry and exit points and better monitor the price strength and weakness as we know upwards price action. Moving away from the main is a sign of price strength whereas price action moving closer to it.

Well, that's a sign of price weakness. A lot of people complain in the comment section or they send me messages asking me why my trading style is so repetitive trading gains or one inconsistency there not one and complicating everything. That being said, honestly, my trading style really isn't that simple. Each individual step is very easy to implement by putting everything together can a challenge for a lot of people.

I Also use a lot of fundamental analysis with a lot of sectors of the stocks that I trade, especially the biotech sector. But the beauty with Leveraged ETFs is that there's not a whole lot of fundamental analysis that's really bad appliable. But anyway, since we are on Jaehnig, I should also mention dust. Now dust is deleverage.

short index on gold. effectively an inverse of Jaehnig. Now, it's not an exact inverse and I know some people would want to pick that up, but they both hold gold as the underlying asset, so in effect it's very similar and they perform in an inverse way. But in any case, we see that we can take advantage of these dips from uptrends again and again while having the upward trend direction that we love.

Now Tea QQQ is another one. This is one of the most popular leveraged ETFs out there. It is basically a leveraged version of triple Q which is basically a tech focused offshoot of the S&P 500. This one tends to have pretty good run ups as well, but they do perform a little dirtier.

They tend to not have that clean run up above the SMA line, but rather have breakdowns amongst the price strength. If you were to take advantage of buying in an oversold and selling at an overbought, you need to set your validation or selling out point a little less conservatively in order to take advantage of that. But in any case, there are actually a lot of leverage ETFs out there and this video really only focused on some of the best opportunities that I see in the current market. If you'd like to learn more, you could simply use Google and Google search a list of the top leveraged ETFs to trade the things I would look for our high volume, high volatility, and inverse pairs.

But my suggestion when you're piling through the list is to not discount ETFs that are plummeting because again, you could just trade the inverse pair if it has an inverse pair. Okay, so with that being said, should you focus on trading leveraged ETFs or should you focus on traded individual stocks or should you create a combination of the two? Well, the argument with trading Leveraged ETFs is that if you can recognize and learn how several leveraged ETFs trade, you could hypothetically just focus on those and stay consistent. In fact, some people just trade one leveraged ETF and trade ad as well as its inverse and that is like their entire trading inventory and that works for them. A lot of people feel that trading a lot of different things in different sectors makes it hard to be consistent since you are working a bunch of different markets and with a bunch of different underlying variables.

Personally, I Do think that there is truth to this argument. Sort of the jack of all trades, but master of none. But like with anything, it's really up to the individual. I Like to trade a bunch of different sectors because I find only training leveraged Etfs to be too boring.

and when things get boring I tend to perform worse and make less money overall. Thus, in my personal trading, I tend to follow any part of the market that provides the volatility that we need to trade off of. Sometimes that means trading leveraged Etfs. Sometimes that means trading biotech.

Sometimes that means trading marijuana stocks. Sometimes that means trading big mainstream tech stocks. But whatever it is. I Focus on trading stocks that have the volatility that we need to trade off of.

All right folks. I didn't really touch that much on natural gas and I know that's a huge topic of interest for a lot of people, but luckily I did make a video on that a couple months ago and I'll put a link in the description below to that video. We of course also have many resources available for you. We have a great trading tutorials playlist.

We have the zip Trader Circle Facebook group and we now have a discord chat as well. These are all great resources that you could use to immediately start learning about investing and trading within the stock market. As always though, make sure to practice all your strategies before you actually go into the market. Learning how to trade is not easy, so practice in at risk free ways such as using on demand training or by paper trading.

And when you do start trading, make sure to always have a plan. This is not a place for little boys and girls who hold in hope. With that being said, have a great day and I'll see you in the next video.