You're absolutely right—UPRO is the only leveraged instrument we use in the model.
Gold and Bitcoin are always unleveraged, regardless of investor profile. For clarity:
Market Index: UPRO (3x S&P 500)
Gold: GLD (tracks spot gold, unleveraged)
Bitcoin: BTC (spot or regulated ETF equivalents like GBTC—also unleveraged)
Even for more aggressive or younger investors, we don’t use leveraged gold or Bitcoin products. The reason:
Our model already provides downside protection through rules-based tactical allocation. We only hold an asset when the trend, momentum, volatility, and macro filters align—otherwise we move to cash.
So while UPRO brings the desired convexity for equity exposure, the risk is always managed through signal-based exits. That’s what allows us to use leverage intelligently, without layering on uncontrolled risk.
Since Bitcoin or even GLD did not exist, what other instruments do you use to backtest the strategy?
Gold is existing much longer, so we are trading gold since the beginning.
For BTC we just started it in 2017, before we tradet oil and bonds. But BTC is more predictable for rule based systems so we switched
What happens when the GBTC is in a prolonged downtrend like in 2023? What other instrument do you use if any?
I guess you mean 2022? 2023 was a hardcore bull market.
2022 results from oure BTC system was -12.78%. I will write a post about oure system in this special year
In your June 18 post, you have a section on Who should use Which Model.
For the conservative investor, what are the Instruments tickers to use (UPRO being a 3x ETF) for the Market Index, Bitcoin and Gold?
For the aggressive investor (younger), what are the instruments and tickers to use for Gold and Bitcoin? are they leveraged as well?
Thanks
JCBDA
Hi Jean-Claude,
Thanks for the thoughtful question.
You're absolutely right—UPRO is the only leveraged instrument we use in the model.
Gold and Bitcoin are always unleveraged, regardless of investor profile. For clarity:
Market Index: UPRO (3x S&P 500)
Gold: GLD (tracks spot gold, unleveraged)
Bitcoin: BTC (spot or regulated ETF equivalents like GBTC—also unleveraged)
Even for more aggressive or younger investors, we don’t use leveraged gold or Bitcoin products. The reason:
Our model already provides downside protection through rules-based tactical allocation. We only hold an asset when the trend, momentum, volatility, and macro filters align—otherwise we move to cash.
So while UPRO brings the desired convexity for equity exposure, the risk is always managed through signal-based exits. That’s what allows us to use leverage intelligently, without layering on uncontrolled risk.
Hope that clears it up!
– The Tactical Allocation Desk