Vibha Jha USIC Champion

Vibha Jha’s Million Dollar TQQQ Trading Strategy

Trading stocks can be daunting due to the variety of strategies and ever-changing market conditions. However, Vibha Jha, a seasoned US Investing Champion, has honed her investment techniques over the years. Vibha secured the 2nd position in the Money Manager Division, where participants manage a minimum of $1 million, achieving a remarkable 70% return. She also earned a 100% return in the 2021 competition, finishing in 2nd place again. Here's what we can learn from her expertise.

Strategic Risk Management and the Use of Stop Losses

One of Vibha's initial struggles was managing concentrated positions and setting stops, especially when she couldn't watch the market all the time. However, she devised a stop-loss strategy based on moving averages, and put more weight on understanding the fundamental aspects of stocks rather than getting too focused on technical analysis. Vibha's ability to adapt to changing market conditions and individual stock performances has been a game-changer.

In 2023, she only took 10 trades with 7 of them being losers and 3 winners. Despite her 30% win rate, she made 4x on her wins compared to her losses. She ended up closing out the 2023 US Investing Championship with a 70% return. This is a great example of why risk/reward management is so incredibly important in trading.

Watching How Stocks React

Vibha has learned to pay close attention to how stocks react after major events like earnings reports. By carefully studying companies' quarterly performances and looking beyond short-term fluctuations, she's become great at choosing stocks based on their long-term trajectory rather than just short-term gains.

Vibha spends time daily to assess overnight moves and plans how to react accordingly to the market. She also spends time after the close to track distribution days, the performance of individual names, and overall account performance.

Vibha watches her positions very closely and is always looking for warning signs. She prefers to sell into strength and always keeps an eye on volume and price. Vibha likes to be risk-averse when it comes to earnings and only holds if there is a cushion and decent growth potential.

Leveraging Moving Averages for Strategic Trading

  • Vibha tracks the distance between how far the price is from the 10/21 day, and the slope, to either sell into strength or prepare for potential market pullbacks.
  • She will buy TQQQ on a pullback to the 10-day or 50-day moving average, but only if the volume is low on the pullback. This suggests that the pullback is unlikely to continue.
  • She sets her stop loss at 8% below the 10-day or 50-day moving average.
  • She will add to her position if TQQQ first comes back to the 50-day moving average and bounces from there. She will also add to her position if there is a three-week tight consolidation.

Diversifying Investments for Risk Mitigation

Vibha diversifies her investments by allocating a portion of her portfolio to swing trading and another portion to buying and holding individual stocks. When swing trading, she utilizes the TQQQ leveraged ETF, which is designed to provide triple the daily returns of the Nasdaq 100.

She tends to buy TQQQ towards the end of the week, because in her experience, the price tends to smooth out by then. She sets her stop-loss orders based on the 10-week or 50-day moving averages. When buying individual stocks, she looks for companies with the potential to be market leaders and double or triple in value over time. She tends to sell down on her TQQQ position when she starts buying individual stocks.

Advanced Techniques in Trading $TQQQ

A crucial element of Vibha Jha's trading strategy involves her use of TQQQ, a leveraged ETF. Using this ETF, she tracks market movements very closely. This enables her to capitalize on short-term movements. With a focus on technical indicators and market trends, she navigates market volatility with precision, utilizing sell signals and adjusting position sizes accordingly.

TQQQ includes major tech companies, making it an attractive option for traders interested in high-liquidity stocks. Vibha focuses on short-term movements when trading TQQQ. She typically uses this strategy when the market is coming off a bottom or correction, with relatively tight stops. She always sells into strength and her goal is to capitalize on 25%-30% moves.

Vibha’s sell rules for TQQQ include:

  • Declining volume
  • Distribution days
  • Losing the 10-day moving average.

Embracing Continuous Learning for Trading Success

Throughout her trading career, Vibha Jha stresses the significance of ongoing learning and adaptation. She has refined her selling rules and become adept at spotting warning signs through a process of trial and error. Her openness to evolving her strategies has been a key to her success.

Vibha Jha’s experiences offer valuable lessons in stock trading. She emphasizes mastering the fundamentals, diversifying investments, and maintaining flexibility. Her success illustrates that with the right approach and perseverance, anyone can become a skilled trader or even the next US Investing Champion.

Jump to: How the Volatility Contraction Pattern (VCP) can boost your trading strategy.

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