Frequently asked questions

Which Broker do you recommend?


Interactive Brokers generally charges the lowest commissions on stock trades. Their platform is easy to use and they offer Registered Retirement accounts for both US and Canadian clients. Banks are generally the most expensive and reduce your profitability. www.interactivebrokers.com




Should I trade using $USD (US dollars) or $CAD (Canadian Dollars)?


In order to trade the preferred 3x leveraged stocks – SPXL and TQQQ you would need to transfer your funds into $USD. Canadian ETFs HSU.to and HQU.to can be purchased in $CAD but carry less pop at 2 x leverage. The system results are based on using SPXL and TQQQ.




How do leveraged ETFs such as TTTQ, SPXL, HSU and HQU work?


Direxion Shares are designed to seek daily investment results, before fees and expenses, of 300% or 200% of the performance (or 300%, 200% or 100% of the inverse of the performance, in the case of a bear fund), of the benchmark index that they track. Daily market fluctuations cause net asset levels to rise or fall, which results in portfolio adjustments to help ensure that exposure levels for the following day are set at the correct multiple. Direxion rebalances exposure daily by buying or selling swaps to ensure that each fund tracks as closely as possible to 300% or 200% (or 300%, 200% or 100% of the inverse in the case of a bear fund) of the benchmark’s daily performance. To obtain the necessary exposure, Direxion Shares will invest all or a portion of their net assets in derivatives— typically swaps or futures. These derivatives are agreements that provide the ability to gain exposure to respective indexes and sectors without the need for full dollar-for-dollar investment. These instruments are designed for short investment time horizon of just a few days that’s because the investment objective of virtually all leveraged and short ETFs is to achieve short-term investment results that correspond to the daily inverse or daily magnified performance of their respective indexes.
Investors that want to bet on the long-term gains or losses of a particular asset class or industry sector should probably not be using daily leveraged and short ETFs. The education area of DirexionInvestments, the creators of triple leveraged ETF’s, is mandatory reading http://www.direxioninvestments.com/education




Are there Tax Considerations with using ETF’s?


If investing within a Registered Retirement account there should be little concern. Direxion, the creators of TTTQ and SPXL offer this explanation for those who choose to trade on taxable accounts:

Dynamic asset allocators and traders are appropriate users of leveraged index ETFs as they do not have the same sensitivity to distributions as long-term investors. Traders generally do not seek to delay recognition of gains (or deferral or taxes) and, as a consequence, generate short-term capital gains, which are taxed as ordinary income. As a consequence, a trader will be negatively impacted from a tax perspective by a distribution only if the distribution exceeds the amount of the trader’s short-term capital gains in the current calendar year. Long-term investors are not appropriate users of leveraged index ETFs.




Why do you trade so few ETF's or stocks?


As concluded by professors at Mason school of Business in Virgina information overload from too many sources is a major reason of underperfomance for non-professional investors. They recommend that information needs to be sufficient without being overwhelming, and be easy to use in order to actually be utilized. We strongly believe this to be true and as such have built a system that is complex 'under the hood' but distilled and delivered in a simple easy to use fashion for anyone to use. https://www.investopedia.com/articles/financial-theory/11/negative-impact-of-information-overload.asp




Why is there a debate about Market Timing?


Every bank and most Investment advisors will tell you that market Timing does not work..why is that? The main reason is that they have a vested interest to keep you invested in GIC's and Mutual Funds. Imagine for a second if the majority of investors instead of a small minority pulled their money out of Mutual Funds and began timing the market - frankly it would be so disruptive that market timing would no longer work. So let us be glad that most don't practise it; that's the reason why it works, and that is also why we limit membership. The reality is that Market Timing for non-professional investors is a relatively new phenomenon only made possible by the onset of the Internet. Sophisticated real-time Charting systems empowering non-professional investors have only been around for a short 20 years or so. Most who pontificate against the use of Timing are singing from an old hymn book since it was virtually impossible to gather the necessary research in the previous 80 years to formulate any kind of credible system. We marvel at our ability to view real-time 1,5 or 60 minute charts of almost any stock trading in the world as well as daily, weekly and monthly. We at ClearpathSignals have literally viewed thousands of charts in various time frames, superimposing and testing countless indicators in order to reach our findings. That simply could not have been done 30 years ago. Let us be clear however that market timing is not easy. We're just saying that it is possible because of the new technology available.




What are the differences between Clearpath Relaxed model and Clearpath Agile?


The RELAXED model aims to remain invested as much as possible. It looks to capture gains over a longer multi-week horizon. Once overbought situations are identified profits are captured; it then waits for the next safer entry point to go back long. Though geared toward outperformance, this model's main attribute is to steer investors toward safety. The goal is actually to post a profit in recessions. The AGILE model looks to capture shorter time frame opportunities, mostly when the market has gone up or down too much too fast and is ready for at least a short-term reversal. Relaxed model will remain in those situations, Agile will trade them. We recommend that first time subscribers wait for price to be in a consolidation phase before initial purchase.




Should I use a charting program and which one?


It would be helpful to follow a few charts to help you navigate the trades. The main symbols to follow are $COMPQ and $SPX along with their similar leveraged versions -TQQQ and SPXL. We would recommend that you bookmark both Daily and Hourly charts as some trades may require the use of 60 minute chart set-ups. As for charting programs we like BigCharts.com or Stockcharts.com. In BigCharts use Advanced chart setting and input symbols SPX, COMP, SPXL and TQQQ. In 'time' setting use 3 months for daily and 5 days for hourly. In 'frequency' use daily for daily charts and hourly for 60 minute charts. In 'price display' use candlestick. In 'chart size' use Big. You can then add these charts to 'favorites' to save. Please keep in mind that stock quotes may be delayed by 15 minutes - you may need to download an app such as stocktracker for real-time data or subscribe directly on charting program. Stockcharts symbols for the S&P500 and Nasdaq Composite are $SPX and $COMPQ respectively. In BigCharts they are SPX and COMP. We may have trade instructions referring to SPX and COMPQ but the stocks to be traded are TQQQ and SPXL . For example, a trade instruction may read: "For Agile model - Buy TQQQ after 3:50pm if $COMPQ comes down to test 7101 today AND bounces up to above 7150 after 3:50pm " If you have any questions please send us a note.





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