As you begin using the alerts, you can boost their power with this one rule exception that can help a 400% return over 2.5 years quickly become nearly 600%!
Under normal circumstances, as you scale into an investment, you will avoid adding to your position if the next scaling in purchase causes you to to exceed your remaining available capital.
For example, if you are 80% invested and receive a scaling in alert for 40%, this would cause you to be 120% invested. As such, under normal circumstances, you would skip the investment..
However, we’ve realized that by going ahead and investing up to 110% of your capital you can create significant growth. In the example above, instead of investing the alert’s 40%, you would invest 30% as that is the maximum trading capital you’ll be able to invest with margin.
The key element for this technique to work is having an account with available access to margin. By using margin as an extra capital reserve, you can tap into it just when it is needed most. Through the multiplying power of margin, both 3x and 2x leveraged ETFs are able to take advantage of 110% of your available capital.
(Margin can magnify a 2x leveraged ETF to the performance of a 3x leveraged ETF. This is important because of the maximum one can invest before moving a market.) If one is limiting their investing to 2% of the 30-day average daily volume, eventually one will have to move beyond the 3x ETF and start utilizing the 2x ETF combined with margin. In doing so,, one can expand one’s total available maximum investment.
In any case, the simple step of using Margin from time to time to maximize investing dollars will greatly enhance long term performance by letting you take partial advantage of typically deeper alerts (with a scaling-in factor of 30% or 40% meaning they have a high likelihood of success.)
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