Tax-friendly

QLD ISA (2x)

Same QQQ 3/161 signal, but trading 2x QLD — a milder variant that suits tax-advantaged accounts.

How it works

Identical signals to QQQ 3/161, but the traded asset is 2x QLD instead of 3x TQQQ. Volatility and drawdowns are gentler, making it easier to hold through noise and well-suited to tax-deferred accounts (the Korean ISA in the original write-up). Optimization part 5 recommended it alongside the 3x variant.

32.5%

10y CAGR (sim)

-34.5%

Max drawdown (sim)

Signal & traded assets

Signal (chart)	QQQ · 3-day × 161-day SMA
Traded asset	QLD (2x Nasdaq)
Parked after sell	SGOV (short-term treasuries)

Rules

Signal	QQQ 3-day vs 161-day SMA
Buy	3-day crosses above 161-day → buy QLD
Sell	3-day crosses below 161-day → sell all QLD
Trait	Lower volatility & MDD than 3x — good for long-horizon tax-advantaged accounts

Charts on real data

Last 5 years · green shading = holding periods

Last 10 years · growth of $1 (no taxes/fees)

FAQ

Why QLD over TQQQ?: Lower expected return, but much shallower drawdowns. In accounts where losses can’t offset taxes, avoiding deep drawdowns helps after-tax results.
Do I need an ISA?: No — it works in any account as the “milder leverage” option.
Can I run this alongside a TQQQ strategy?: Yes — the source series suggests it. A common setup separates accounts: QLD in the tax-advantaged one, TQQQ 3/161 in a regular account.
How is this different from just holding QQQ?: Unlike buy-and-hold, it avoids falling regimes, so the time spent in the market is higher quality. Compounding 2x leverage while skipping drawdowns beat QQQ buy-and-hold on both return and MDD in backtests.

Sources

• Optimization part 5

Backtest charts on this page reproduce the app’s rules on Yahoo Finance daily data (last 10 years, adjusted closes) for reference only. Taxes, fees and slippage are not modeled, and past performance does not guarantee future results. Rule descriptions and live signals always follow the app’s latest implementation. Nothing here is investment advice; decisions and responsibility remain yours.

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