Since Jeff is traveling, I'm providing the weekly ETF update.
Over the last several weeks we have tried to highlight some important aspects of ETF trading. Each week has emphasized a different principle. Taken together, the points below are a handy guide for ETF trading. Each point has a link providing more detail.
- Anyone putting money at risk in financial markets needs a system.
- Whatever your system, you need to test it before you use it.
- Why technical analysis is useful for ETF trading.
- Those following a disciplined investment method and avoiding common traps are more likely to capture important market moves.
- If you are confident in your method, you can ride out market adversity.
- Buying a commodity ETF provides diversification without requiring expertise in specific stocks.
- While the fundamentals of foreign stocks can be difficult to analyze, an ETF trading method can offer participation in multi-national markets.
- Exit rules are different when dealing with an ETF because it is viewed as a portfolio, rather than a group of individual trades.
- Choose position size based upon what you can afford to risk, not what you want to gain.
- Focusing on sectors contributes to overall market feel.
ETF Sector Update
We have been using our own system to illustrate the various ideas. This week was interesting, with a number of position changes. Jeff will comment more upon his return.