Thursday, November 13, 2008

Inside Bars - ETF vs. Stock

The first chart is a short (gold) AEM I did in my trading account and the second chart is the Betapro (bear) ETF which I traded in my retirement account. Both charts are mirror images of each other. The inside bar is the trigger bar, but I use the outside bar as my stop. I tried to trade them in the same manner, but with a futures short on at the same time, it was hard to manage. I wanted to take a partial at the morning swing high/low because I was expecting a C&H pattern to develop. Instead prices ripped straight through and exited the balance at the 100% extension.

I did a fast calculation of AEM-TSX vs. the Beta proshares and there's only a 28% premium on the proshares for the same amount of capital risked over the same period of time (excluding a partial).

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