In this article I will briefly point out 3 easy swing trading strategies. As you may already know ETfs are exchange traded funds. The benefit of them is that you are essentially buying a large group of stocks as if they are only one. This helps reduce risk. While reducing risk is good it makes it more challenging to realize large gains like you could on a risky penny stock.
So why do people swing trade ETFs and why is it one popular ETF Strategy?
The main reason traders swing trade ETFs is because they do not want to keep their money tied up in any specific ETF. For example, I once tried a value added approach to investing in an ETF long term. I held my position for years and ended up breaking even. It was frustrating. That’s when I started learning more about how to swing trade ETFs.
Is there a disadvantage to swing trading ETFs?
Yes. You pay more in taxes. This is why you must first decide if trading is right for you. If you want to be an investor that’s great. This means you can simply find an ETF, buy it and forget about it for at least 10 years and hope for positive gains. If you want to be an ETF swing trader then you will be more active. You will need to constantly be learning about ETFs, trading ETFs and searching for new ones.
Why is it important to learn Etf Swing Trading Strategies?
It is important because you need to try to increase your odds of success. Strategy makes sense. As an analogy imagine two NFL football teams. If one has a strong game plan and the other doesn’t who has the better chance of winning? It’s that simple.
What are a few Etf Swing Trading Strategies?
One of the main strategies is to find a hot sector. The market goes through trends much like fashion or music. When such a trend arises you can ride the trend short term. The goal is to get in, make some profits and get out before the trend dies off. It is always happening so you can take advantage it.
You can also use a common sense approach. What you do is pay attention to your everyday life. If you hear about something new pay attention to it. For example, I have recently been hearing a lot of buzz surrounding Instagram, Facebook, and Pinterest. So what should I do? The first thing is to see what they have in common. In this example they are all social websites. So is there a social ETF? There sure is: SOCL. Now I would need to research SOCL. Let’s see how it’s been doing.
As you can see if you were to hold this one long term you would be quite upset. However, if you use technical analysis there is money to be made here. You just need to know the right entry and exit points.
The last strategy is to look for extremely volatile ETFs. In layman’s terms look for ETFs with huge peaks and valleys. It just so happens that the chart above illustrates this as well. The hard part is getting the timing right. You have to guess correctly when to get in and get out. This is where it helps to understand candlestick chart patterns and technical analysis when choosing an ETF swing trading strategy.
Do you know of any other ETF swing trading strategies? If so please comment on them below. Our goal at The Trade Locker is to help our members become better traders for free. If you have any expert advice please share it with the other members. If we work together we can achieve more. Also, don’t forget to check out our new stock message boards, our latest breaking stock news, our forum, and our new stock quote page.