Nov 7, 2026 · 1h 21m
Masonson pairs leveraged trading with strict risk controls
32,000% TQQQ AI Backtest: Systematic Trading with Les Masonson
Leveraged ETFs can magnify gains and losses, making disciplined rules, realistic backtests, and drawdown planning central to survival.
- 1Masonson separates trading from investing, urging explicit rules, small initial positions, and decisive loss-cutting.
- 2Relative strength, breadth, and multi-timeframe indicators help identify leadership while filtering out short-lived market noise.
- 3TQQQ’s daily reset and severe drawdowns make leverage, execution, taxes, and bear-market preparation inseparable from strategy design.
Don't miss
Masonson explains why TQQQ’s daily reset can produce severe drawdowns even when its underlying index appears broadly resilient.
The brief
Les Masonson, who began studying markets in the 1950s, argues that traders need education, explicit rules, and a clean separation between investing and trading.
His intraday framework combines one- and five-minute charts with RSI, MACD, CCI, Keltner channels, VWAP, moving averages, and multiple confirmations rather than one decisive signal.
Masonson uses AI systems to backtest and verify code, but warns that poor data, vague prompts, and overfitting can make impressive results unreliable.
Relative strength and market breadth extend the method beyond individual trades, helping track sector leadership and flag deterioration when rankings weaken alongside moving-average breaks.
The sharpest caution concerns TQQQ: its daily reset can magnify returns but also deepen drawdowns, especially in flat or declining markets, demanding careful leverage and bear-market planning.
Masonson’s durable rule is less about trading constantly than staying prepared: use the right vehicle, protect capital, and step aside when focus or health fails.
What was said on this episode
27 statements · 14 positive · 9 negative · 1 mixed · 3 neutral
- Les Masonsonon technical analysisPositive9:23
Technical analysis is not a weak approach to participating in markets.
“So to say that technical analysis is a weak way to play the market, it's a ridiculous thing.”
Listen at 9:23
- Les Masonsonon market-timing approachPositive10:18
A valid market approach should exit before bear markets begin.
“it's very important to use a true approach that gets you out before the bear market begins.”
Listen at 10:18
- Les Masonsonon NASDAQ E-mini futuresPositive13:13
Multiple indicator crossovers near a lower Keltner band increase odds of NQ reversal.
“once you get three or four of them crossing and you're at the bottom of a three standard deviation channel, the odds are that the NQ will reverse its direction.”
Listen at 13:13
Semiconductors returned 200% over the cited 19-week period.
“the top performer was the semiconductors, 200%. return in 19 weeks.”
Listen at 29:46
Micron returned 638% over the cited 52-week period.
“52 weeks, 638%.”
Listen at 31:02
The semiconductor triple-leveraged ETF gained 445% in the cited period.
“So if you just bought the semiconductor triple leveraged ETF, You're up 445%”
Listen at 31:20
- Les Masonsonon Robinhood-style betting marketsNegative42:35
Robinhood-style betting-market activity is likely to result in total losses.
“the odds are you'll lose it all.”
Listen at 42:35
- Les Masonsonon serious bear marketNegative42:55
A serious bear market will occur.
“We are going to have one.”
Listen at 42:55
Successful market wizards use different trading methods.
“If you read all the market wizard books, no two wizards do the same thing.”
Listen at 48:38
Mental and physical activity can help ward off Alzheimer’s disease.
“if you can ward it off by staying active mentally as well as physically it makes a big difference”
Listen at 51:00
- Les Masonsonon leveraged Nasdaq ETFsNeutral54:17
TQQQ and QLD target threefold and twofold daily QQQ moves, respectively.
“3X means if Qs go up 1% today, The TQQ goes up 3% and the QLD goes up 2% today only.”
Listen at 54:17
- Les Masonsonon leveraged ETFsNegative54:36
Flat or declining markets cause leveraged ETFs to decay in value when held.
“The worst market for a leveraged ETF, if you hold them, the worst market to be in is a flat market or a down market because it decays in price every single day.”
Listen at 54:36
A 30% three-day TQQQ loss requires approximately a 37% recovery gain.
“If the TQQ went down 10% three days in a row, it needs to get 37% return to get back to that minus 30%”
Listen at 54:53
TQQQ gained approximately 35,000% from inception through the cited date.
“it's up about 35,000% if you bought it and held it.”
Listen at 56:48
“you would have lost all your money twice.”
Listen at 57:20
“The NASDAQ Composite Index was up 86.2% in one year”
Listen at 57:33
The Nasdaq Composite later fell approximately 80% in the market crash.
“it dropped, you know, 80%.”
Listen at 57:46
TQQQ trades about 50 million shares daily and has approximately $34 billion in assets.
“the TQQ trades probably around 50 million shares a day. And it has assets of about $34 billion in TQQ.”
Listen at 59:46
Investors should begin with unleveraged QQQ exposure before using leverage.
“you may want to start just with the triple Qs. No leverage.”
Listen at 1:00:16
TQQQ fell 61% during 2022.
“T-Triple-Q dropped 61% in 2022.”
Listen at 1:02:06
Cash is a favorable position during bear markets.
“Cash is a good place to be in a bear market.”
Listen at 1:02:55
- Les Masonsonon trading decisionsPositive1:06:43
Trading decisions should be rule-based and unemotional.
“You want to make everything rule-based, no emotion, follow the rules.”
Listen at 1:06:43
- Les Masonsonon trading lossesPositive1:07:05
Traders should cut losses quickly.
“you want to cut your losses fast.”
Listen at 1:07:05
The strategy exits TQQQ when price falls below its specified moving average.
“If the price is below a certain moving average, you don't want to be involved at all.”
Listen at 1:15:19
A TQQQ backtest gained 32,000% but experienced an 81% drawdown.
“The TEEQQ went up 32,000% during the backtest period. The problem is the 81% drawdown.”
Listen at 1:16:35
- Les Masonsonon backtest variablesNegative1:17:48
Adding more backtest variables increases the risk of real-time strategy failure.
“The more variables you have, the more risk that it will never work in real time.”
Listen at 1:17:48
- Les Masonsonon trading strategy drawdownPositive1:18:19
A 10%–20% drawdown can be acceptable for a strategy.
“if you get a decent drawdown, 10% or 20%, that's terrific, actually.”
Listen at 1:18:19
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
Books & mentions
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