# Understand Signals

## There are two signal examples on the above chart:

### Signal 1 was at 15:30 on March 15, suggesting Long QQQ Short IWM, and would hold until April 7. Market rose during this period but the NASDAQ 100 Index rose faster than the Russell 2000 Index. Assumed you have $30,000, there are several trading options:

#### Option 1: margin account. You can buy $30,000 QQQ and short sell $30,000 IWM. The theoretical return would be 6.0%, or $1,800 profit.

#### Option 2: cash account. You can buy $15,000 TQQQ and buy $15,000 TZA. The theoretical return would be 18.0%, or $2,700 profit.

#### Option 3: future account. You can long 1 NASDAQ 100 micro e-mini future MNQ and short 3 Russell 2000 micro e-mini future M2K. Exposure on each side is approximate $30,000. The theoretical return would be 6.0%, or $1,800 profit.

### Signal 2 was on April 7, suggesting Short QQQ Long IWM, and would hold until April 21. Market fell during this period but the NASDAQ 100 Index fell faster than the Russell 2000 Index. Assumed you have $30,000, there are several trading options:

#### Option 1: margin account. You can short sell $30,000 QQQ and buy $30,000 IWM. The theoretical return would be 4.5%, or $1,3500 profit.

#### Option 2: cash account. You can buy $15,000 SQQQ and buy $15,000 TNA. The theoretical return would be 13.5%, or $2,025 profit.

#### Option 3: future account. You can Short 1 NASDAQ 100 micro e-mini future MNQ and Long 3 Russell 2000 micro e-mini future M2K. Exposure on each side is approximate $30,000. The theoretical return would be 4.5%, or $1,350 profit.

## The returns on the latest two signals were about flat despite the market was very volatile during the period.