Triad 170 Strategy Overview

Triad 170 is Triad with one change: during the recovery phase of a U.S. equity drawdown, and only then, the U.S. large-cap sleeve is held through a 3x S&P 500 ETF (UPRO) instead of an unleveraged one (IWB). Everything else is identical to the base version. Same three sleeves, same momentum signals, same defensive exits, same drift bands.

It is the most aggressive strategy in the Triad family, and the page below spends most of its length on what that costs rather than what it earns. The sleeve rules and candidate sets live on the Triad page and are not repeated here.

What the 170 means

The name is the maximum total notional exposure when leverage is fully deployed. Triad's nominal weights are 30% real assets, 35% U.S. large cap, 35% secondary growth. Substituting a 3x fund for the middle sleeve triples that sleeve's notional exposure and leaves the other two alone:

30 + (35 x 3) + 35 = 170%

Notional exposure sits at 100% whenever leverage is dormant, which is most of the time, and reaches 170% only in months when Smart Leverage is deployed and the large-cap sleeve is near its nominal weight. Across the 1980 to 2026 backtest, leverage was deployed in 143 months out of 560, roughly a quarter of them. Put the other way, Triad 170 is an unleveraged strategy in about three quarters of all months.

How Smart Leverage decides

The module is identical to the one Triad 135 uses. Only the substituted fund differs.

Dormant. Nothing happens. The intended allocation passes through untouched.

Armed. IWB has closed a month 10% or more below its highest prior month-end close. That is the only thing that can arm the module. A drawdown does not deploy leverage. It makes deployment possible.

Deployed. From armed, leverage deploys in the first month where U.S. large cap has better weighted-average momentum than T-bills and Triad's sleeve 2 wants equities that month. The momentum measure weights the trailing one-month return 25%, three-month 25% and six-month 50%.

Sleeve 2's own eight-month trend test comes first and cannot be overridden. Leverage is only ever applied on top of a position the base strategy already wanted to hold, which means Triad 170 never holds a 3x fund into a downtrend the base strategy had already exited.

The three exits

• Momentum turns. T-bills catch up to or pass U.S. large cap on the weighted-average measure.
• Sleeve 2 goes defensive. The leveraged position is sold with the sleeve and sleeve 2 holds Treasuries.
• The 13-month cap. No deployment runs longer than 13 consecutive months.

The cap matters more at 3x than at 2x. A leveraged fund tracks a daily multiple of its index, so its return over a long holding period depends on the path the index took and not only where it ended up. Choppy, high-volatility markets erode a 3x position faster than a 2x one, and the effect compounds with time held. Capping every deployment at 13 months bounds that exposure by construction. The specific figure is 13 rather than 12 so a deployment running its full length clears the one-year holding period for long-term capital gains treatment.

One trigger, one deployment

When a deployment ends, for any of the three reasons, the module resets fully and the drawdown that started it is spent. Favorable momentum the following month does not redeploy it. Only a fresh 10% drawdown from a new peak can arm it again. The result is 19 deployment episodes across 46 years, averaging about eight months, rather than repeated re-entry on every momentum flip. At 3x, that restraint is the difference between an overlay and a liability.

Why only the large-cap sleeve

Sleeves 1 and 3 are never leveraged. The real-assets sleeve holds gold or broad commodities; the secondary sleeve may hold international equities, mid-cap value, managed futures or long/short equity. Those positions carry Triad through the periods when U.S. equities are not working, which is exactly when you least want borrowed exposure attached to them.

U.S. large cap has the deepest liquidity, the most heavily traded leveraged products and the best-documented recovery behavior after a drawdown. It also has the simplest sleeve rules, so the overlay has the fewest interactions to reason about.

What 3x actually costs

January 1980 through September 2026, net of trading friction:

The identical maximum drawdown across all three needs care, because on its face it suggests 3x leverage was free. It was not. Triad's worst drawdown happened in March 1980, when Smart Leverage was dormant and nothing was deployed, so all three variants took the same loss. That number describes when the worst drawdown occurred, not what leverage costs.

The cost shows up in the MAR column, and it scales with leverage. Triad 170 earns a couple of percentage points more per year than base Triad and gives up a meaningful share of its risk-adjusted efficiency to do it.

Whether that is a good trade depends entirely on whether you will still be holding during the months that produce the Ulcer figure. An investor who abandons the strategy in its third bad month captures the cost without the return.

A 3x sleeve also drifts fastest of the three, so the five-point drift band is breached considerably more often: 43 band resets over the backtest, against 32 for Triad 135 and 30 for base Triad. More resets means more trades, and the cost of letting a sleeve drift between them rises with leverage.

Who it is for

Triad 170 suits an investor who already holds and understands base Triad, has a long horizon, and has thought concretely about how they will behave during a drawdown rather than assuming they will be fine. The leverage is opportunistic and time-limited, so the portfolio is unleveraged most of the time, but when it is deployed the equity sleeve moves three times as fast as the index.

It is a poor fit if any of the following are true. You would not hold base Triad on its own merits. You are investing in a taxable account and are sensitive to short-term gains. You would struggle to leave the strategy alone through a deployment that goes against you. Or you are drawn to the headline return without having read the MAR column beside it.

Triad 135 runs the identical module at 2x and keeps meaningfully more risk-adjusted efficiency. For most investors who want leverage on Triad, it is the better starting point.

The base strategy in brief

Triad divides capital across three independently-signalled sleeves rather than splitting it between stocks and bonds. Each sleeve combines relative momentum, which candidate is strongest, with absolute momentum, whether that candidate is trending up at all, and each exits to intermediate-duration Treasuries on its own signal without consulting the others. Weights are nominal rather than fixed, so sleeves are left to compound and the portfolio resets only when one drifts more than five percentage points from target.

The full rules, candidate sets and portfolio characteristics are on the Triad strategy page.

Past performance, including backtested results, is not indicative of future results. Backtested performance is hypothetical, does not reflect actual trading, and benefits from hindsight in the selection of strategy rules. Portions of the long-term history rely on reconstructed proxy data for funds that did not exist for the full period. Leveraged ETFs carry risks beyond those of their unleveraged counterparts, including the effect of daily rebalancing on returns over holding periods longer than one day. A 3x fund can lose value over an extended holding period even when its underlying index is flat. Investors should carefully consider their risk tolerance and consult with a financial advisor.

For the latest details, visit www.DualMomentumSystems.com