The number one reason to day-trade is to avoid overnight risk. By taking positions in the market on an intraday basis and exiting on or before the close, traders using day-trading strategies eliminate one major source of risk for that portion of their portfolio devoted to day-trading, and lower overall portfolio risk.
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Exchange-traded funds (ETFs) are ideal trading vehicles for short term traders – in fact, some ETFs, such as leveraged ETFs, are built with short term traders, if not day-traders, in mind.
ETFs allow traders not only to minimize single stock risk, but also allow traders to access markets, such as international markets, that would otherwise be difficult to trade due to liquidity issues. In other words, why try to trade a Malaysian stock when you could trade a Malaysian country fund or even a Pacific ex-Japan regional ETF?
Why Day-Trade ETFs?
Our day-trading ETF strategies are up more than 20% since August. Day-trading exchange-traded funds like the ^FAS^, up more than 14% in a recent ETF day trade, and the ^TNA^, up more than 22% in a recent ETF day trade, traders using our day-trading strategies take advantage of volatility with smart, statistics-based intraday trades rather than trying to wait out the storm in cash or gold.
“What this is doing,” said Larry Connors, founder of TradingMarkets, “is taking advantage of the volatility that exists in the marketplace. (The strategies) did this in 2008, they continued to do it this summer, in August, September and beginning here in October.”
For example, back during the surge in volatility in September, our ETF day-trading strategies proved a superior way to deal with market extremes. On September 26, with volatility at new highs, our ETF day-trading strategies returned 21 for 21 winners. Every ETF day-trade position enabled traders to take advantage of extreme volatility on an intraday basis only – without exposure to overnight risk.
This isn’t your uncle’s approach to day-trading, either. Rather than sitting in front of the screen all day, you will take advantage of our quantified ETF day-trading strategies to place your orders before the market opens, take advantage of intraday pullbacks, and exit on the close. Traders can even automate their day-trades to make our fast and easy strategies even faster and easier to trade each day.
No overnight risk? Check. No frenzied trading? Check. No sitting in front of the screen all day? Check and double check.
And no black box – all of the rules for our ETF day-trading strategies are fully disclosed. You’ll know exactly how each trade works every time.
In order to succeed as markets get both more correlated and more complex to trade, traders and investors need as many winning strategies at their disposal as possible. If you aren’t taking advantage of the volatility by trading ETFs intraday, click the link below to find out why now might be a good time to start.
David Penn is Editor in Chief of TradingMarkets