Originally Posted by
Here$14U
Hi Lady;
May I make a suggestion? TZA as you know is a 3X Bear fund. It is very volatile. It is basically a day trading vehicle, getting the most bang out of your buck. When I own it, or any other ETF's I don't use stops other than mental ones. I watch the price in relation to the 20 day moving average. If the price can keep pulling that ma up (staying above it) I will continue to play the ETF. Of course I'm constantly trading with 4% increments so TZA or FAZ are constantly getting me in or out so my risk isn't that high as I'm only playing with about 10% of my holdings per ETF.
Buying TNA to hedge your TZA position will work providing you know when to sell your TNA position. There are a couple of ways to do this. See what Oscar says for S&P targets at livewithoscar.com (so you know about when to sell TNA) and take the hedge off. Another thing I do is look at a ratio chart. Go to stockcharts.com and type in TZA:TNA and add your favorite indicators. The indicators will show you if TZA is overbought or oversold in relation to TNA. Try CCI6or7, its one of my favorites. Hope this helps.:)