Day Trade TNA

TNA, the Direxion Small Cap Bull 3X, triple-Leveraged ETF is designed to yield results approximately same to 3 times (300%) the return of an investment in the Russell 2000® Index, which is comprised of smallest 200 companies in the Russell 3000® Index index. This means that for example, if the Russell 2000 moves 2% up in a particular day, TNA should be up approximately 6%. However, there is no guarantee that this fund will always yield the same return as the underlying index.

Below is the breakdown of the composition of the companies in the index.

Financial Services - 14.59%

Consumer Discretionary - 10.45%

Technology - 10.41%

Health Care - 10.35%

Producer Durables - 9.18%

Materials & Processing - 4.34%

Energy - 3.67%

Consumer Staples - 2.10%

Utilities - 2.00%

I have been daytrading TNA for quite some time. There are many advantages of day trading TNA.

1. Since it's very volatile, it's a nice candidate for day trading.

2. Return is nice if you are in the right direction.

Disadvantages of day trading TNA is that the stop most of the times is much larger or fake stopped out are most common.

Below are the trading styles that I normally use to day trade TNA.

Holy Grail Setup - This setup was originally described in Linda Bradford Raschke’s Street Smarts book. The ETF has to be in a trend, be up or down. Stock moves with the trend and then slowly retraces to the 20 EMA in an orderly fashion. My entry is near/at/above the 20 EMA. It is best when there are some nice candles supporting the entry.

Flags - Bull and bear flags in the most widely used chart pattern. It has a nice reward ratio compared to the risk involved. A thrusty move in one direction followed be retracement upto 65% of it's previous move. Entry is when price starts to continue in the previous trend.  Volume is one important criteria to watch. Volume should be high in the upthrust move and should diminish considerably during the retracement which normally indicates that the ETF is digesting the move before continuing the trend.

On quiet days, using Fast Stochastic indicator has proved to yield good results. Buy when fast stochastics moves from under 20 and short when the fast stochastics move below from above 80 reading.

Other chart patterns have been found to yield nice results too.

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