Education only, not advice. Leveraged and strategy-driven investing can lose most of its value quickly. Figures are historical or backtested and do not predict future results.
Three families
- Value averaging: 3 Sig (the 3% Signal), 6 Sig, 9 Sig. Rebalance quarterly toward a growth target.
- Trend following: TQQQ FTLT, Holy Grail. Hold leverage only in uptrends.
- Risk parity: HFEA. Hold leveraged stocks and bonds together.
Side by side
| Strategy | Main holding | Leverage | Signal | Checks | Reported max drawdown |
|---|---|---|---|---|---|
| 3 Sig | IJR or SPY + bonds | 1x | 3% quarterly signal line | Quarterly | About -52% |
| 6 Sig | MVV + bonds | 2x | 6% signal line | Quarterly | About -78% |
| 9 Sig | TQQQ + bonds | 3x | 9% signal line | Quarterly | About -72% (2010 to 2026) |
| FTLT | TQQQ and others | 3x | SPY 200-day + RSI | Daily | Varies by variant |
| Holy Grail | TQQQ + cash | 3x | TQQQ 200-day + RSI | Event-driven | No public record |
| HFEA | UPRO + TMF | 3x | None; fixed weights | Quarterly | About -65% (2022) |
Numbers come from different sources and periods, so compare them with care.
What they share
- All can lose most of their value in the wrong market.
- All depend heavily on the test period; 2010 to 2021 was unusually kind to leverage.
- All require discipline to follow through a deep drawdown.
Choosing, if at all
- Decide how much you could lose without abandoning the plan. See Maximum drawdown.
- Keep any leveraged strategy a small part of your total money. See Position sizing.
- Prefer rules you understand fully over the best backtest. See Overfitting in investing.
See also
- Leveraged ETFs explained How leveraged ETFs like TQQQ and UPRO work, why they reset daily, how volatility decay erodes them, and what their historical drawdowns look like.
- Volatility decay What volatility decay (beta slippage) is, why leveraged ETFs lose value in choppy markets, a worked example, and the formula that estimates the drag.
- Maximum drawdown What maximum drawdown is, how to calculate it, why losses need bigger gains to recover, and historical drawdowns for stocks and leveraged funds.
- How to read a backtest Which numbers in a backtest report to trust, which to question, a checklist for spotting unrealistic results, and how to compare a strategy with a benchmark.
Last updated September 30, 2026. Education only, not investment advice.