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Only triple leveraged ETFs can give you that kind of reward.   Of course, the same goes for the risk in trading these leveraged ETFs.  The rally lasted for a few days for a few reasons

1.  FED said something that I do not even remember.
2.  The CEOs of Bank of American and Citi said they were profitable last month.

I still remember clearly that  Dick Fuld, the CEO of now bankrupted investment bank, Lehman Brothers, said “We are not Bear Sterns and We are in a very good standing”  when the price of their stock stood around 44. 

As I indicated in this post http://www.momdaytrader.com/blog/2009/03/18/stock-market-which-hat-are-you-wearing/,  I was going to swing trade FAZ and SRS.    That is exactly what I did.  Well I did not trade SRS because they move in the same direction and FAZ is more volatile.  All my trader friends on Twitter talked about this and knew that I was going to trade them. You can see all my trading thoughts published here http://twitter.com/trader_mom.   It takes 2 minutes to join us on Twitter and it is totally free. 

Here is the FAZ trade.  Click on the picture to have a better view.

If you have been following my portfolio, you know that I did not take the 10% profit in my last FAZ trade.  Had I taken that profit, I would have ended up with only 10% in this trade too. That is why a trading plan is very important. For readers not familiar with these inverse ETFs,  they go up when the market goes down and vice versa.  They are leveraged short funds.  If I think the market is going down, then I will go long on FAZ, which is equivalent to shorting the market.  Here are my thoughts on the FAZ trade above.

1.  Odds were in my favor since my system had had a bunch of small losers in a row. It was about time to hit something. 
2.  It was a 26k worth position.  If we multiple it by 3(triple leveraged fund), it is 78k. I normally outlay 50-60k for one batch of trades.  So I increased the position size, which I explained in this post http://www.momdaytrader.com/blog/2009/02/02/day-trading-fas-one-shot-one-kill/ 
3.  Here is the most important thing. I was up close to 10% on the same day as I opened it. 3X ETFs rarely gap-down more than 15%. If it had gaped down next day by 15%, I would have lost only 5 %( 1300). My target was 40% or around 10000. 1300:10000 was a very good R/R set-up.  My first stop loss was 10% that would make the R/R ratio 1:4 which was not bad at all. 
4.  The Odds was in my favor and it had a solid risk/reward ratio. I had to pull the trigger.

Tactically speaking, here are 2 things

1. I did not try to catch the bottom as you could see from the chart above. 
2. I would have held onto it for the 40% target if it were not for the weekend.   And because I had a specific target in my mind, I did not prematurely exit it. I moved my stop loss to break even after I was up around 10% and never touched it again until I closed it.