TQQQ for the Long Term - Composer

This is “TQQQ for the Long Term,” a strategy built by a Composer power user named Dereck Nielsen originally shared on Reddit and later adopted and evolved by the Composer community. The strategy blends mean reversion and momentum to decide when to rotate between TQQQ, UVXY, TECL, UPRO, SQQQ, and TLT creating a portfolio with higher risk-adjusted returns than TQQQ on its own.

The script has two visual components: a table and plot as seen above. The table tracks every single underlying indicator in our strategy and their current evaluation. The plot shows a single selected indicator so you can monitor how it has changed over time. You can select a different indicator in the Inputs dropdown.

The core of “TQQQ for the Long Term” is built around two ideas: momentum and mean reversion.

When SPY is trading above its 200-day SMA, the market is trending upwards and we want to be long TQQQ unless the 10-day RSI of TQQQ and SPXL indicates the market is overbought, in which case we temporarily rotate into UVXY to capitalize on volatility.

When SPY is below its 200-day SMA, we check whether the market is oversold (in which case we'll enter bullish assets like TECL, UPRO, or TQQQ. Otherwise, we'll hold either SQQQ or TLT.



In Composer, you can backtest how this strategy would have performed and even trade it automatically. For example, from June 2022 to today, this strategy has returned over +400% with an annualized return of 82%. And when backtested as far back as the 1970s using a simplified version, it actually thrived during periods of high inflation, quantitative tightening, and even stagflation. See the full backtest, trading logic and performance data here: app.composer.trade/symphony/m8Hkj9NHOTljuTRLmVoy/details



Please note that past performance is not indicative of future results and trading involves risk.