Hi,

I'm considering a subscription to ETF Pairs Arbitrage. I have a few questions:

1. I assume this underlying logic of the system to is identify arbitrage opportunities in TQQQ and SQQQ and exploit those?
2. Therefore, the system should work equally in bull and bear markets – IE, there should be minimal correlation of system success and bull markets – is that right?
3. Is there a margin requirement? I see mention of margin in different parts of the description and forum, but it isn’t clear. If I start with $10,000, with a 97% allocation, where does the margin come in?
4. Why are returns with TQQQ and SQQQ so much higher than with QID and QLD?
5. In some of the forums, I see that the number of entries and exits in a year is anywhere between 5 and 10. That works out to one entry trade and one exit trade every two months, roughly? Is that right? Elsewhere I saw something about receiving and email signal every day.

Thanks.
Key

One more question: in some of your posts, where you state the performance track record of the system, you have a column labeled "EXposure %" - what does that refer to?

Thanks.

Mehul, welcome aboard.

QUOTE:
Elsewhere I saw something about receiving and email signal every day.

The reason here is that WealthSignals is never silent. You should get a daily "No signals today" email even when author doesn't plan to enter or exit. Failure to claim NST is penalized on 2nd occurrence. Please find more details here: WealthSignals Legal Disclosures and Policies

QUOTE:
"EXposure %" - what does that refer to?

To quote the Wealth-Lab User Guide, Exposure (%) is:

<<The total market exposure of the trading strategy calculated on a bar by bar basis. The Exposure metric measures the area of portfolio equity that was exposed to the market. For example, say you have $100,000 and buy $25,000 worth of stock at the beginning of a simulation. If the prices of your purchases never change, you would have a flat equity line at $100K (assuming 0% interest on free cash) and an "exposed" line $25K. Notice that this forms a rectangle within a rectangle, and therefore exposure is 25%, which is the percentage of the equity curve exposed to the market.>>

Mehul:

1) What I do in my personal trading is leverage up the QLD signals with TQQQ trades as much as possible and the QID signals with SQQQ and that was to clarify why the system is marked as not personally traded is because it is for attracting retirement and cash and margin accounts so that the more conservative folks don't have to be the most aggressive to earn a high return.
2) No comment. Almost once per year and possibly twice in a year the system will go long QID or short the NDX.
3) Fidelity's Margin Requirement on QID and QLD is 50%, meaning you could almost put 196% into them rather than the 75% margin requirement or 1/0.75=1.33 into TQQQ or SQQQ.
4) They're much higher because a 3x instrument is 50% more leveraged than a 2x instrument, and when using margin an additional 33% beyond that.
5) Everyday you'll receive communications from me and most of those are NST No Signals Today E-mails but while you're in the trade you would have gotten an exact share count to buy in QLD or QID and because 97% is used on each trade, it simply means to leave a slight cushion on your orders for market open the next day and the ETF Pairs Arbitrage Algorithm was always an EOD system so don't be tempted to enter until the open because it's usually worse if you just go in when you get the signals anywhere from 4:15 EST at the earliest and 7:30 AM the next day EST at the latest.

Thanks BWO, Eugene. A couple more questions:

1. I live in a time zone that's 9-10 hours ahead of Eastern time in the US. Accordingly, I can place buy and sell orders before New York market hours, or during the first half of the trading day in New York. But I won't be awake at the close of the market. Would this strategy work as designed in that situation?

2. Would you have a table of monthly returns going back to 2006, as you've shown since March 2015? I'm aware that those may be hypotethical/ result of a back test, but would still be helpful.

3. To go back to my earlier question 2., above: My question was more about whether the algorithm is designed to deal with scenarios of extended market decline (say over the course of months or longer), and specifically, how it tries to avoid situations of near total loss of capital. If the algorithm is in a situation where drawdowns are around 40%-50% (e.g., 2008-2009 back test), would it behave differently than when recent returns have been positive?

Thanks.

1) There should be ample time to place trades.
2) It's in the system description.
3)From what I've seen there is no total loss of capital. It's high risk, just not entirely high risk.