Effective ETF Trading System Hints For Beginners
As you get going in ETF trading you are going to find that there are a lot of strategies, systems, and methods. The method, strategy or system that is best, will be the one that works for you. An ETF trading system may be very effective for one person, but not for another. The effective trading system will be one that matches your personal style, your skills, and your ETF goals. To find that system you will need to work through a few to find the one that is the best fit for you.
The challenge of finding the best trading system is in researching and learning how to identify systems that are worth trying. There are many websites that offer training and books about an effective system that will work. However, in reality the best websites will offer training, books, information, forums, and chat groups on all the strategies, methods, and systems. You will be able to learn from successful traders who have already tried various systems and can tell you why they were not effective.
Starting small and slow with ETF trading is going to provide an opportunity to learn the techniques that work best. Many successful ETF traders agree that the learning curve for ETF training is around two years. If a person loses nothing in the first year, most of these traders agree that it has been an excellent year for that beginner. Setting realistic goals and expectations and setting up a safety net will be extremely helpful in making it through the learning curve unscathed.
There are a few steps that one can take to ensure that they have a safety net when moving through the learning curve. One is to set a stop-loss and stick to it. By setting a stop-loss, a person is not going to lose more than they expect. The ETF moves in fifteen second increments during the trading day. A person can lose a lot of gains in that amount of time if they are using the wrong system or strategy for them.
Setting buy and sell points and/or "take profit" prices is also a great part of a good safety net. If a person has not quite gotten the knack for spotting trends and knowing when things are getting ready to tank down yet. Having buy and sell points can get you out of trouble before you get into it. Once you feel confident with technical and historical analysis of your sectors you may want to relax the strategies that you employ for safety. But many traders use the setting buy and sell points strategy very successfully throughout their trading.
It may take some digging, but if you look you will find that each of the ETF trading systems has a breakdown that provides information about their risk, how hard they are to use, the parameters to set, and other information that will help to analyze that system. The ratings may be low risk (I haven't seen any), medium low to medium, high risk, and well there are systems beyond high risk, I just don't go there.
Any system that has trend following in some part of it is a good way to learn the structure of ETF trading and make effective use of the trends that are happening in a sector. Many new traders start with an ETFA (Exponential Moving Average) system. This system is a medium low to medium risk, easy to use system that basically is about trend following. The trader sets parameters for fast EMAs and slow EMAs and when the lines cross, you move. The system is most effective with RTH, SMH, SPY (long only), XLE, XLF, and TLT.
It is always good to start tracking a system before trading using the system. In this way you can see how effective it is on a consistent basis. When trading, there will be many opportunities for gain that come around, the system that connects you to those gains on the most consistent basis will be the correct system for you. - 23162
The challenge of finding the best trading system is in researching and learning how to identify systems that are worth trying. There are many websites that offer training and books about an effective system that will work. However, in reality the best websites will offer training, books, information, forums, and chat groups on all the strategies, methods, and systems. You will be able to learn from successful traders who have already tried various systems and can tell you why they were not effective.
Starting small and slow with ETF trading is going to provide an opportunity to learn the techniques that work best. Many successful ETF traders agree that the learning curve for ETF training is around two years. If a person loses nothing in the first year, most of these traders agree that it has been an excellent year for that beginner. Setting realistic goals and expectations and setting up a safety net will be extremely helpful in making it through the learning curve unscathed.
There are a few steps that one can take to ensure that they have a safety net when moving through the learning curve. One is to set a stop-loss and stick to it. By setting a stop-loss, a person is not going to lose more than they expect. The ETF moves in fifteen second increments during the trading day. A person can lose a lot of gains in that amount of time if they are using the wrong system or strategy for them.
Setting buy and sell points and/or "take profit" prices is also a great part of a good safety net. If a person has not quite gotten the knack for spotting trends and knowing when things are getting ready to tank down yet. Having buy and sell points can get you out of trouble before you get into it. Once you feel confident with technical and historical analysis of your sectors you may want to relax the strategies that you employ for safety. But many traders use the setting buy and sell points strategy very successfully throughout their trading.
It may take some digging, but if you look you will find that each of the ETF trading systems has a breakdown that provides information about their risk, how hard they are to use, the parameters to set, and other information that will help to analyze that system. The ratings may be low risk (I haven't seen any), medium low to medium, high risk, and well there are systems beyond high risk, I just don't go there.
Any system that has trend following in some part of it is a good way to learn the structure of ETF trading and make effective use of the trends that are happening in a sector. Many new traders start with an ETFA (Exponential Moving Average) system. This system is a medium low to medium risk, easy to use system that basically is about trend following. The trader sets parameters for fast EMAs and slow EMAs and when the lines cross, you move. The system is most effective with RTH, SMH, SPY (long only), XLE, XLF, and TLT.
It is always good to start tracking a system before trading using the system. In this way you can see how effective it is on a consistent basis. When trading, there will be many opportunities for gain that come around, the system that connects you to those gains on the most consistent basis will be the correct system for you. - 23162
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posted by X - Men @ 2:37 AM
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