SOXL / SOXS , this ratio analysis shows when to trade eachSOXL is the triple leveraged semi-conductor ETF while SOXS is its inverse. While SOXL
is primarily up trending in its intermediate and full-time history, it does from time to time
have a correction mainly when the technology sector gets challenged. I have found that
plotting the ratio of the share values is a very accurate way of pinpointing those corrections
and temporarily buy some SOXS to offset the downward price action and nullifying any
loss. This is more or less insurance in case the overall position must be closed for one reason
or another or transient hedging. As can be seen, these corrections last 1-5 days . This strategy
is effective risk management as during the correction the SOXS gains some of what SOXL
loses especially if the share dollars are equally balanced. Ever better is the same thing on
a 2-3 hour time frame albeit it with more hedging trades.
I have found that this strategy works on a variety of inverse ETF pairs. Most of them however do
not have one side going up more or less continuously and instead oscillate rather than simple
and shallow corrections like this pair. Please give a like if you this this could be helpful to your
trading.
