I think there's a place for leveraged ETFs, but just as if you're trading futures contracts, or Options, your risk is increased exponentially, and especially in today's pump 'n' dump markets.
But even with proper money management, and discipline you will occasionally get burned.
Examples of Leveraged ETFs being used to manipulate markets
$NFXS (NetFlix bear fund) - I believe this fund was only created in order to help the Mag 7 bulls create enough leverage to drive NetFlix to their $1000 target.
This fund is constantly manipulated in order to set the bear trap, and if you watched CNBC Fast Money yesterday, then you know NetFlix (up 5%) is all they talked about for the first half hour of the show.
$NFXS is hammered back below trend, before it's hammered back below the 50 day ma.
$NFLX breaks out to a lower recent high - reminiscent of a bear market
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Next Example
$KOLD (2x leveraged Natural Gas Bear fund) This one was absolutely destroyed starting around the time Trump was elected, and if you were trapped back in Dec., you will probably never be made whole.
That's the thing about these leveraged funds, once they break, they tend to remain broken, for a very long time. However, if you have the patience to wait for capitulation, you can get back to even, as we now see see it back-testing the 27.77 level, after 2 months.
Next Example
$SBIT (Bitcoin 2X leveraged bear) this is a good example of why you shouldn't trade leveraged ETF's
If you recognized where the rug was pulled back in November, and you cut your losses, then you lived to trade another day, but if you were trading on hope, you were wiped out.
I could offer many other example, and just recently we saw the Tech bears destroyed again, as we trade on light holiday volume.
Of course they want to blame Trump for manipulating the market, but markets are manipulated - for sport - every day.
Take Care, AA
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