ETF Trading System For Beginners - System Rules
As you start looking at systems, strategies, and methods, you're going to look for the one that will best meet your needs. There are some traders that don't feel an ETF trading system is necessary, they begin trading without any real strategy or plan and shoot from the hip on most of their trades. So, you might wonder if you need a system at all.
The Turtle ETF trading system was an experiment that was conducted in'83. Richard Dennis and Michael Eckhardt wanted to find out if people who had not experience with ETF trading could learn, and be successful in trading following a simple strategy.
This experiment was very informative. The structure of an ETF trading system lies in the rules of the system. Step A moves to Step B, etc. Most systems are very simple and have the same rules for entry, what the trader needs to follow, and exit.
Most systems have two elements, one is trend following and the other is vector rotation. While an ETF trading system may sound successful and doable, if a person does not want to follow trends, they are not likely to follow the rules of a system that involves trend following.
The individuals who participated in the Turtle experiment showed average annual returns of up to 80%. These individuals follows the rules set up by Eckhardt and Dennis strictly and did not deviate. But, there were/are flaws in the system. For that reason, there have been many hybrids of the Turtle ETF trading system developed and introduced over the years.
When selecting a system you will want to fully understand the structure and rules that make the system effective. To see consistent gains from a system, it must be followed and paired with the strategy that will maximize its effectiveness. It must also be used in the right sectors. The effectiveness of a system in one ETF may be seriously different when used in another sector.
Most traders are using different systems simultaneously. One ETF trading system may work great with a vector, while the same system will be ineffective for another vector. Studying the effectiveness of a system for the vector you are trading in will allow you to make knowledgeable decisions about which systems and strategies to employ with your ETF trading.
The better you understand a system, the easier it is to set realistic goals. Setting buy and sell limits is the safety net for any system or strategy that is being used for the first time. Knowing the history of the ETF trading system will help to plan an exit strategy based on the trends of the sector that is being followed.
Discussing different strategies and their effectiveness with other traders and professionals will also be beneficial. By doing the research and homework before investing in the trades using an ETF trading system, you will be able to find the best system for you. When a system sounds good, but the rules of the system are not what your personality would follow, it is best to find a system that is more compatible with your personality. - 23212
The Turtle ETF trading system was an experiment that was conducted in'83. Richard Dennis and Michael Eckhardt wanted to find out if people who had not experience with ETF trading could learn, and be successful in trading following a simple strategy.
This experiment was very informative. The structure of an ETF trading system lies in the rules of the system. Step A moves to Step B, etc. Most systems are very simple and have the same rules for entry, what the trader needs to follow, and exit.
Most systems have two elements, one is trend following and the other is vector rotation. While an ETF trading system may sound successful and doable, if a person does not want to follow trends, they are not likely to follow the rules of a system that involves trend following.
The individuals who participated in the Turtle experiment showed average annual returns of up to 80%. These individuals follows the rules set up by Eckhardt and Dennis strictly and did not deviate. But, there were/are flaws in the system. For that reason, there have been many hybrids of the Turtle ETF trading system developed and introduced over the years.
When selecting a system you will want to fully understand the structure and rules that make the system effective. To see consistent gains from a system, it must be followed and paired with the strategy that will maximize its effectiveness. It must also be used in the right sectors. The effectiveness of a system in one ETF may be seriously different when used in another sector.
Most traders are using different systems simultaneously. One ETF trading system may work great with a vector, while the same system will be ineffective for another vector. Studying the effectiveness of a system for the vector you are trading in will allow you to make knowledgeable decisions about which systems and strategies to employ with your ETF trading.
The better you understand a system, the easier it is to set realistic goals. Setting buy and sell limits is the safety net for any system or strategy that is being used for the first time. Knowing the history of the ETF trading system will help to plan an exit strategy based on the trends of the sector that is being followed.
Discussing different strategies and their effectiveness with other traders and professionals will also be beneficial. By doing the research and homework before investing in the trades using an ETF trading system, you will be able to find the best system for you. When a system sounds good, but the rules of the system are not what your personality would follow, it is best to find a system that is more compatible with your personality. - 23212
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posted by X - Men @ 8:22 AM
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