In this video we look at a super powerful technique that BEATS the S&P 500 by 3X!
The S&P 500 is the perennial benchmark that most market experts measure results against, and matching it is as simple as trading an S&P index ETF like SPY, but what about BEATING the S&P 500? Is that as simple?
It can be by using leveraged ETFs such as SPXL. This fund will track SPY but seeks to return a 3X result. Now in fairness, this can also work against you, but when following the simple trend system laid out in this video, over time your results will start to stack up.
Check it out, understand it, and let me know if you have any questions!
OVERVIEW:
In this video we will discuss the following:
• Part 1: Trade SPXL
• Part 2: Avoid devastating drawdowns
• Follow the Moving Average System
• Only trade Bullish swings
Resources Mentioned In This Video:
Transcript: (auto-generated, not edited for mistakes)
hey if you've been investing very much
at all you certainly know everybody
wants to match and beat the market
that's the that's the standard right how
can I beat the market what if I could
show you a way that you can beat the
market by a factor of three that's what
we're going to look at in this video
Let's
[Music]
Go
[Music]
hey everybody it's Jeremy Whaley here from
Trade Maestro you can check us out over
at Trad maestro.com Trad maestro.com and
of course if you haven't liked and
subscribed to the channel then please do
so in this video what I want to do is I
want to share with you how you can beat
the S&P 500 using a simple ETF strategy
that does three times better how does
that sound to you well if it was that
simple wouldn't everybody do it well one
would think everybody would do it but of
course you've heard me share the
statistics of how bad the so-called
professional fund managers are 95% of
them cannot even match the S&P much less
Beat It by a factor three so I'm going
to show you how to do that in this video
now to get started there are two parts
of this process the first process is we
got to do better than the S&P 500 that's
the first step and that's pretty easy to
do um I've done another video which show
shows you how to beat the S&P every time
and so I'll try to remember to link that
up here and uh you can click over and
watch that one this one's a little bit
different cuz I'm going to show you how
to beat it by a factor three and I'll
show you a special technique for that
but then part two of this is how to
avoid the painful draw down and that is
the bare market so before I go any
further let me talk about that for a
minute one of the biggest problems that
people have in the market is not
actually trading the market and making
money but rather it's avoiding
the pain avoid the draw down that's
what's going to happen in a bare market
so let's say that the market let's say
you had $100,000 and you um you rode the
market up and it was now worth 130 and
then we had a bare market and your
130,000 became worth
115 that 15,000 difference between 130
and 115 that's called Draw down okay and
so how can we avoid that how can we not
have all this massive draw down which
hurts people so bad and just to put it
in perspective in 2020 2 for example the
beginning of 2022 we got into a bare
market and the S&P 500 over the next
several months it was about eight8 or9
months um it was down 25% so that means
if you had $100,000 that $100,000 went
down to 75,000 okay that's painful okay
how can we avoid that and then the worst
part is it took all of 2022 and all the
way through 2023 just to get back to
break even so if you look at that as a
cross-section let's say you had been
investing maybe since 2020 and maybe you
started investing right after the
pandemic when things were really cheap
you had all this profit now you get to
the beginning of 2022 it takes a 25% hit
and it takes another year just to get
back to break even how could we avoid
that okay that is what I'm talking about
when I say avoid the pain avoid the big
draw downs and if you can avoid that
that in and of itself is going to put
you ahead of the vast majority of
Traders because what most people do is
they just to use aose term they huddle
they hold on for dear life and that's
even though people say to do it it's not
actually a really good investment
strategy um a lot of people do it and
they kind of slowly get rewarded for it
so they keep doing it but it's really
not a good plan and I'm going to show
you a much better method for it so um
that's the first part here is do better
than the S&P 500 second part is to avoid
those painful draw downs and I'm going
to show you a technique to do that so
first part let's do the first thing and
that is to beat the S&P 500 by a factor
of three you're going to use ticker
symbol
spxl spxl now what is spxl spxl is an
exchange traded fund that trades the S&P
500 with a 3X leverage that's it it's
the S&P
500times 3 so what that means is when
the market goes up spxl is going to go
up three times okay by a factor of three
it's a 3x leveraged fund so if the let's
say the S&P goes up 10% spxl is going to
be up 30% kaching so compare that if you
invest in spy which is just the regular
spy for um for the S&P 500 if you invest
in that say you had $100,000 and it went
up to 110 well that same $100,000 put
into spxl would go up to1 130,000 that
is fantastic so let's stop there
remember this is only step one but let
me take you over to our charts and I
will show you what spxl looks like so
I'm going to pull that up for us here
spxl and there it is that is the S&P 500
3x okay now let me just kind of show you
I'm going to see if I can do a
comparison here uh I always forget when
I'm recording these videos to get these
set up just perfect before I start so
then I have to do them like in the video
which a little awkward but that's all
right okay so what you see across the
bottom is you see SPX that's actually
the um S&P 500 Index what I want to
do let's get those kind of lined up
there okay that's pretty much lined up
what I want to do is I want to change
this bottom ticker from SPX I want to
change it to spy because this is the 1X
fund that trades the um S&P 500 and what
you're going to see is you're going to
see that we pretty much have the same
dips in the the same valleys it all
looks the same okay except for the
percentage so let's do a little bit of
math here and this is going to get
awkward because nobody likes well some
of you like to do math I don't like to
do math but let's just do a little bit
of math and let's go from the
um we're going to go from right here and
the reason I'm going to say this right
here is because come on pen work for me
okay what is going on
there we go right here uh that's about
440 on spy okay so we'll just write that
in there so we have that as a
reference and the reason I'm using that
particular trigger is because that's
where we would have taken the trade um
if you've watched my videos on how to
know when to get into the trade this is
exactly where we would get in so there
you go that's why I'm going to set that
as the entry in fact I'll show you that
here later in this video all right so
let's come back here um for spxl that
price point becomes about
$83 okay now here's where the cool part
comes you
ready right now as I'm recording this
video Spy is at
47484 almost
475
okay
spxl is at 104 53 so I we'll just say
104 we'll round it okay now do a little
bit quick math here here's how this goes
we're going to pull up our trusty old
calculator because listen in case you
don't know you do not need to be an
expert at math to trade the market
effectively I have a music degree that's
right I am not even a trained
mathematician I pretty much suck at math
which is why I use my calculator all
right so here we go oh no I didn't mean
to do that one forgive me for that one
that's just an extra line on the chart
that we don't need Okay so let's do some
math here um
104 minus 83 so 104 was our current
price 83 is where we started that is
$21 per share in profit $21 per share if
we look down here it's $474 since I
rounded the top one down I'll round this
one down too 474 minus
440 and that should be 34 in profit now
I know what you're thinking you're
thinking H $34 a share is a lot more
well it's not really but I'll show you
I'm going to show you okay now to put
this in in a couple of perspectives
um let's start here remember let's
assume we'll just assume a $100,000
trading account it could be 10,000 it
could be 5,000 could be a thousand
doesn't matter we're going to assume
$100,000 okay so let's say that we had
$100,000
okay divided by our our stock price
which is
$83 so we can buy
1248 shares so we'll go 1,4 shares okay
now down
here we have the same
$100,000 one two okay got it and then
this entry price was 440 so that's only
227 shares
227 so we're common sizing this so now
what you're going to get is you're going
to get
227 shares time 34 as opposed to 124
shares time 21 so you can see already
this is going to be worth a lot more
right so let's see how much actual
profit we got here okay so let's go back
um 227 shares times our $34 per share
profit and definitely got to use a
calculator for that 227 time
34 is $
7,718 not bad now remember we started
with $ 100,000 so
7 I can actually do this in my head but
we'll put it here
7,718 divided by
100,000 going to put a k there means you
got
a the way you do that is you do 77 18
divided
100,000 it's going to be
77% okay so that's
7.7% Roi in about a month not bad really
fantastic frankly all right now let's
see what happens at the top here we had
124 time $21 a
share and if you did the math on that
which we're going to do
1204 *
21 is what
2,284 20
$25,000 in profit if you had 100,000 you
started with that equals a
25.2%
Roi
25.2% in the
same the exact same time frame you
tracking with me okay I just did all the
math you can rewind it you can go back
and look at it it's all right there spxl
because the way it's designed every time
it's going to 3x it's going to go 3x
what the Spy will
do might drop we'll stop right there
right no I can't I can't and here's why
I can't stop right here because number
one there's more to the system but
number two if you just take what I just
taught you you're going to be devastated
eventually and the reason is not cuz
what I taught you is wrong cuz what I
taught you is 100% right but the reason
is because most people are really really
careless with their
trading what most people do let me talk
to you about this before I get into this
what most people do is they buy and they
hold and they keep holding and they keep
holding and if you do that with
spxl you're going to get really sick at
your stomach on the up swings you'll
have huge profits on the down swings
you're going to be puking your guts out
because it's it's a roller coaster that
nobody wants to endure so how do you
avoid the roller coaster well before I
tell you that let me tell you this you
need to avoid the roller coaster okay
traditional financial planners they tell
you to just buy and hold and keep adding
every time that dips down just add to it
that is terrible wisdom what it does is
it makes for a lot of anxiety makes
people freak out and you never actually
take your profit off the table uh I
don't have time to go all the way
through this but I'm going to show you a
little bit right now I'm going show you
the system for getting out of this so
that you do not end up
seasick while you're trading seasick can
you be seasick while you trade all right
here's step two follow the moving
average system now I've taught this in
many videos it's the core of the
training system that I teach over at
trade mestro I did a video recently on
how to beat the S&P and I taught this
system I'm going to share it with you
right now and here's how it goes you're
going to come over to your
chart and you're going to notice that
these lines that I have on here which
are called moving averages most of you
are familiar with them every once in a
while they turn green you see how it's
green
here it's green here remember earlier I
said we're going to get in about right
here about $83 remember that why well
because if you look at the price of the
stock it was above these moving averages
and the averages turned green there
that's where they turned green so that
was your Buy
Signal okay now Buy Signal sign are easy
buy signals are super super easy
everybody understands how they work
nobody has a problem with it well people
have a problem with is they never want
to sell so they never protect themselves
in the event of that 25% draw down so
let's show you how to do that okay so we
had a Buy Signal back here in April
there was your Buy Signal at that time
uh spxl was around
69 let's say you got in at 70 okay so
you got in at $70 now you stayed in this
trade all the way through until it
turned red right
there that's an exit of
$88 okay so you get out when it turns
red how easy is that when it turns red
you get out turns green you get in when
it turns red you get out okay now there
was a brief moment and see I like to
really try to disclose everything I'm
not one of these people that tries to
sugar coat it and say oh look this
trade's always good it's not always good
let me just show you right here a couple
of days later I'm going to change this
to um yellow okay couple days later you
had another Buy Signal and then an exit
signal right here and you would have
actually lost a little bit of money here
not a lot but you would have gotten back
in around maybe 92 and you would have
gotten back out around maybe 89 so you
would have lost about a dollar or two
maybe $3 per share but what you avoided
in doing that was this draw down where
spxl came all the way down here to $68 a
share now just to put that in
perspective that move from 89 to 62 uh
to sorry to uh did I say 62 69 I don't
know what I said I I had 62 in my head
but from 89 to 69 was $20 uh it's about
20% with spxl nobody wants to survive a
20% draw down okay it only took a couple
months but still nobody wants to hold
through that and inevitably what's going
to happen is if you don't learn this
technique of getting out when you need
to you'll end up selling here or your
sell down here at the bottom you sell
when it's really painful and then you
don't have the courage to get back in
when you need to have the courage you
back in okay so that's why I teach
people when it's green you buy when it's
red you get out and you avoid the pain
and sometimes you'll have a what we call
a whip saw where you get in you get out
and you you lose a little bit but you
don't lose a lot you can sustain a
dollar or two per share that's not P bad
okay but sustaining $20 a share that's
bad and you don't want to have to put up
with that okay so next you get back in
when uh it turns green
again and that's the system right there
so part two of the system is really
simple when the market is bullish when
spxl is bullish that is you got the
green light moving averages are all
moving up when when you green you have
the green light Market's bullish you buy
spxl when the Market's not bullish when
it's either bearish or stuck and it's
starting to go down a little bit you get
out you get out and that way you avoid
the draw down now there's another
benefit to doing this okay you've all
heard people talk about dollar cost
averaging and and um you know adding
more to your positions and whatnot it
only works if you sell it only works if
you actually take your profit so let's
do that for this example here let's say
that when we got into this trade at 70
we took our profit at 88 okay had we
done that 88 minus 70 is $118 per share
okay well $18 let's go back and let's
let's pull up our calculator and do the
same math that we did just a minute ago
$100,000 it's 10,000 we need one more
zero um we had start at 70 okay so that
would have been
1428 shares okay so we did 1428 shares
times $18 per share profit that means
during that time we made $25,000 1428
I'll going write this up here so we see
it okay because some of you going to
want to rewind this and watch this, 1428
shares during this move right here is
$25,000 in profit
2574 to be exact okay now stop right now
now let's just stop the video stop it
that's
25% okay how many of you made 25% in
your portfolio in 2023 because that was
only 6 months of 2023 right there it's
25% easy okay that's not day trading
that's buying and holding it until the
signal says get out just buying and
holding it for about uh April May June
July August so five
months okay you can do that 25% in 5
months then we avoid the 20% pain but
then Watch What Happens because our
account has gone up from 100,000 to
125,340
now instead of being 100,000 we got
125,340
and we can by,
1591 shares did you see what just
happened we're scaling this thing up now
you ride that all the way through where
this chart ends we'll say it's at 104
okay 159 104 minus our entry price is
79 and that was
25 and we multiply that times
1591 and that's 39,000
39,7 se5 now this is two trades over the
course of the year now that's not that's
not overall that's two trades folks two
separate trades you made 25,000 on one
you made 39,000 on the second so let's
just add the
25704 so that's
$65,000 most people did not make $65,000
in their trading accounts in 2023 but
here with just two trades with spxl not
only did you beat the market not only
did you outperform the S&P by more than
a factor of three you made
$65,000 on a $100,000 account that's a
65% Roi now I'm realizing as I'm talking
through this that I actually
inadvertently made a shift my first
examples for the right side of this
chart over here I said what if we got
back in at 80 I think it was
83 and then my second example I
accidentally did it 79 um the actual
entry should have been somewhere between
82 and 83 so forgive me but at least you
capture the idea here um I'll just redo
the math for you here let's say we got
an 83 um we need
12574 sorry this video is probably
dragging now because I'm doing all this
math but one of you is going to catch me
on it okay divid by 83 so we could have
actually done 1514 so 1514 shares
times
um whatever that profit was now I forgot
that so 104 minus 83 NOP not divided
sorry 104 minus 83 there you go so that
would have been $21 profit times 15 14
shares still $31,000 okay so I'm only
doing that just so you can see that I'm
not trying to hide anything I'm not
trying to pad the numbers I want you to
truly see strategically what you can do
here and that's pretty much it now is
there some distinctions for getting in
and some distinctions for getting out
yeah there are um are there some other
money management tools that you probably
want to implement
absolutely but what you have here is you
see what's possible what's possible is
by simply using an easy ETF like spxl
you can not only beat the market but you
can far outperform it and by simply um
using this technique with the moving
average where you get in when it turns
green you get out when it turns
red you can absolutely destroy the
market let's just put it that way you
can destroy the market you can do what
the so-called professionals can ever do
okay now some of you inevitably are
going to ask me about what that
indicator is this is a custom coding
that we have for a trading view um a
series of moving averages that we use in
trading View and if you come to trade
Maestro I'll be happy to share those
with you um so when you sign up as an
inter circle member or anything else I'm
happy to give it to you along with my
trading view training so you know
exactly how to do that but that's not
the purpose of me being here the purpose
of me being here is to show you what you
can do and now you understand it so I'll
recap it for you really fast because
this drug a little bit longer than I
meant for it to trade spxl that's going
to beat the S&P by a factor of three and
then use um the moving average system
when it turns green you buy when it
turns red you get
out that will prevent the massive draw
down and if you just do that folks
you're going to do it you can absolutely
not just beat the market but you can far
outperform okay I hope this has been
helpful for you if you want to learn
more about this this is just one of the
many techniques that you can use with
exchange traded funds and I've taught a
lot of it in this free 3-day challenge
called raging profits with ETFs raging
profits with ETFs if you have not taken
that three-day challenge I highly
encourage you to do so because number
one it's free and number two you're
going to learn a whole lot of stuff so
um you can get there below this video
there should be a link or somewhere next
to the video you can go over to tradem
share.com and you can find it somewhere
over there as well if nothing else click
on the free stuff Tab and you can find
it over at Trad maestro.com and I would
look forward to and love the opportunity
to help you learn some more about ETFs
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next time happy trading to all of you
and we'll talk to you
[Music]
soon
