A Profitable Nasdaq QQQ Long-Term Strategy

Nasdaq QQQ Long Term Strategy

This article describes a Nasdaq QQQ trading strategy. The strategy is easy to manage and it will keep you on the right side of the all the major trends.

You can watch the video below to see me demonstrating the strategy.

Nasdaq QQQ

This strategy is designed to work with the Nasdaq 100 Index, and in particular the QQQ ETF. The Nasdaq is a good index for traders who want to trade trending markets. Historically, the Nasdaq has shown very good long and short trends.

Tradinformed Backtest Model

The best way to become a better trader is to learn how to test the markets. Tradinformed Backtest Models are built in Excel and you can use them to test different trading strategies, different indicators and different markets. To see the model being used, check out the video below.

You can get the model used in this strategy in the Tradinformed Shop.

The Trading Strategy

Market Direction Filter

Nasdaq QQQ Long Term Direction Filter
In this strategy, I am using two long EMAs to provide the market direction. The logic behind this is that I want the trend to change slowly and avoid whipsaws. When the green shorter EMA is above the red longer EMA I will only trade long. When the shorter EMA is below the longer EMA I will only trade short.

The settings that I am using for the EMAs are 150 and 180. In the video below you can see me demonstrating different values.

Trade Entry

I want to enter trades on a pullback. I am using a medium term MACD to identify a market pullback. For long trades, I wait until the MACD has turned negative. For short trades, I wait until the MACD has turned positive.

I am using a MACD with the settings 11, 23, 9

Trade Management

The key to this strategy is good trade management. When the market is trending the strategy looks after itself.

ATR based Stop-Loss

My initial stop-loss is set using the the ATR. I am using the setting of 2 * ATR.

ATR based Trailing Stop

The beauty of the ATR trailing stop is that it reacts to the market. The trailing stop only moves in the direction of the market. So if the market moves in the direction of the trade, or becomes calmer, the stop will get tighter.

I am using the setting of 6 * ATR.

Results

Metric Result
Gross Winning Trades $327,708
Gross Losing Trades $-98,193
Net Profit $229,514
Profit Factor 3.34
Winning Trades 29
Losing Trades 35
Percentage Winning Trades 45%
Average Winning Trade 11,300
Average Losing Trade -2,806
Largest Winning Trade $57,511
Largest Losing Trade $-6,693
CAGR 6.7%
Max Drawdown 19.5%

Nasdaq QQQ Strategy Capital

Video

See the model being demonstrated in the video below:

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