Profitable ETF Trading Strategies

As an individual trader, you must be completely clear about where your edge is out there place as a way to ensure your trading strategies are designed to put you into positions where your edge could make the difference towards the common market return.

Let’s be clear too: your edge should give you a reliable means of achieving higher than average market returns or you are significantly better off merely buying and holding lowest value broad market index trade exchange traded funds funds. To do otherwise would be a waste of your time and get you a lower than easily achievable returns on your capital.

After I consider institutional traders, I see their advantages in computing power, depth of fundamental analysis, administrative trading value efficiency and bonafide inside information, I quickly conclude that there isn’t a means I can discover an edge by trading in direct competitors with these organizations on a basic basis.

This means I am going to avoid situations where my edge would consist of getting a greater understanding of the basic enterprise mannequin and market opportunities of individual firms. The truth that so many companies exit of business resulting from misjudgments of market conditions when led by consultants who have a made a profession out of narrowly specializing in that line of enterprise suggests to me that I can not hope to have an edge in elementary analysis.

I additionally know that I am not capable of scalping higher or market making higher than brokerage houses who’re combating for fractions of pennies on giant volumes in time periods measures in fractions of seconds. So I’ll keep out of that trading setting as well.

I do know that I want enough alternatives to allow my statistical edge in trading to manifest, and so I can’t afford to have overly lengthy holding periods and watch for the ship to come back in. I believe I should be like Walmart and trade in high quality merchandise that everybody wants, take my decent income quickly and cycle by way of stock efficiently. I wish to be the swing center man serving to the market achieve orderly distribution.

This leads me to look for my edges within the swing trade time periods of 1-5 days, and seeking to lock in income and/establish no-lose positions as early as doable on the entry day, and solely hold in a single day when I have clear indications that the extra overnight threat is justifiable.

12 August 2018


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