Tips For Creating An ETF Trading System
One of the biggest problems that most people have with ETF trading systems is that they seem very abstract. Most of the reading that is done about systems is from a marketer selling a system. Some subscription services offer alerts, training, information, etc., to make using a trading system easier. But, they really don't tell you what the trading system is or how it became the "valuable" tool that it is.
Anyone can create a trading system. Most people who become proficient ETF traders develop their own system over the years that is effective and efficient for them. In many cases the terms "trading system" and "trading strategy" get mixed up by people who are not that knowledgeable about ETF trading. The terms do not mean the same thing and this is important to know when looking at advertising.
In it's simplest, uncomplicated definition an ETF trading system are a group of specific rules determining your entry and exit points for your ETF. Those "signal" alerts you hear so much about are actually when the lights on the points indicate it is time to move. In some cases it is when the EMA crosses the SMA or vice versa. The indicators are set by you so that you receive an alert when you will get the most gains from a move in your ETF.
The common analytical tools used to create an effective trading system are not kept behind closed doors either. They are tools like the Moving Averages, Stochastic, Oscillators, Relative Strength, and Bollinger Bands. The information that these tools give you are called "indicators." When at least two indicators are used from one or more of these tools, you have a system.
Now, what makes a system effective and consistently reliable depends on what two or more indicators are used in your system. You may need different indicators for a more volatile sector than you need for a low risk sector. The programs kick out literally hundreds of details that can be used as indicators for some part of your trading.
The time and research needed to create an effective system can be very time consuming. For some people using a pre designed program or service is more cost effective. When a pre designed program or service is used the "rules" or parameters that are used have been identified using another analytical tool that shows what types of indicators are most effective with certain sectors.
Doing the work on one's own will require the same attention to detail and a lot of experimentation. There are however, some rules for the system that should help reduce the risks that are involved in creating your own system. First, the system must consistently have positive returns. Translation, it must make money. When the system has negative returns ten times in a row then you will need to take a hard look at the system and strategy that is being used.
Having a plan in place to reduce risk and limit losses is also important when starting a system. Sticking to the buy and sell limits that the analytical tools have indicated are appropriate will take the personalization out of the trading process and allow a safety net from extreme loss. The system must have stable parameters. Some vectors have very hard to identify patterns, you will want to be aware of the kinds of indicators that appear when there is going to be a drastic reverse. - 23212
Anyone can create a trading system. Most people who become proficient ETF traders develop their own system over the years that is effective and efficient for them. In many cases the terms "trading system" and "trading strategy" get mixed up by people who are not that knowledgeable about ETF trading. The terms do not mean the same thing and this is important to know when looking at advertising.
In it's simplest, uncomplicated definition an ETF trading system are a group of specific rules determining your entry and exit points for your ETF. Those "signal" alerts you hear so much about are actually when the lights on the points indicate it is time to move. In some cases it is when the EMA crosses the SMA or vice versa. The indicators are set by you so that you receive an alert when you will get the most gains from a move in your ETF.
The common analytical tools used to create an effective trading system are not kept behind closed doors either. They are tools like the Moving Averages, Stochastic, Oscillators, Relative Strength, and Bollinger Bands. The information that these tools give you are called "indicators." When at least two indicators are used from one or more of these tools, you have a system.
Now, what makes a system effective and consistently reliable depends on what two or more indicators are used in your system. You may need different indicators for a more volatile sector than you need for a low risk sector. The programs kick out literally hundreds of details that can be used as indicators for some part of your trading.
The time and research needed to create an effective system can be very time consuming. For some people using a pre designed program or service is more cost effective. When a pre designed program or service is used the "rules" or parameters that are used have been identified using another analytical tool that shows what types of indicators are most effective with certain sectors.
Doing the work on one's own will require the same attention to detail and a lot of experimentation. There are however, some rules for the system that should help reduce the risks that are involved in creating your own system. First, the system must consistently have positive returns. Translation, it must make money. When the system has negative returns ten times in a row then you will need to take a hard look at the system and strategy that is being used.
Having a plan in place to reduce risk and limit losses is also important when starting a system. Sticking to the buy and sell limits that the analytical tools have indicated are appropriate will take the personalization out of the trading process and allow a safety net from extreme loss. The system must have stable parameters. Some vectors have very hard to identify patterns, you will want to be aware of the kinds of indicators that appear when there is going to be a drastic reverse. - 23212
About the Author:
Learn how it's very possible to make 6% per month in your investment accounts using etf trend trading! "Big A" is a recognized expert in the world of etf trend trading system and reveals trading and investment secrets that have been kept under wraps by hedge traders for years. Give him your email and get a free report and webinar today!
posted by X - Men @ 8:55 AM
0 Comments
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home