SPXU PROFITABLE TRADE

So here is a trade that followed the trading plan that I have created. I have traded the symbol SPXU that is three times the inverse of the S&P 500. That means that when the S&P 500 moves 1%, the SPXU moves 3% in the opposite direction.

I was looking at the charts on the S&P 500 and expected it to make a downturn. So, if the S&P 500 was going to go down, the SPXU was going to go up three fold. (click on the chart to see the S&P 500 daily chart).


The chart of the SPXU is next. Since the market was probably going to go down, the SPXU was going to go up three-fold. On June 22, 2010, I entered a trade at $31.65 by buying SPXU. The amazing part is that nine trading days later, the trade was exited at $38.77 for a 24.5% profit. I'll take that any day.

This is just one of the three different ways that a stock or ETF can be traded. In a second way, you can use options to keep a trade for a longer period of time, or you can always use options as insurance in the third way of trading. Don't be afraid of the word options. Options are just a way of insuring major losses in stock trading. It can be a learned behavior.