Why do the model returns include margin?
The model assumes that 100% margin is being used (borrowing 50% of the amount invested). For example, if your account has $25,000 in it, your purchase values would be near $50,000. Disciplined QQQ Trading method is an excellent use of margin. Margin trading can increase returns, but also increases risk. Disciplined QQQ Trading was designed to minimize risk through the use of stop losses and by trading in a diversified instrument. Disciplined QQQ Trading can also be employed without the use of margin. The results are also excellent. The yearly returns are 60% for 1998, 50% for 1999, 144% for 2000, 78% for 2001, 53% for 2002 and 67% for 2003 when no margin is employed.
