Best of the Battle Plan: Trading Strategies for Commodity ETFs
Commodity ETFs trade differently than equity ETFs. We’ve said this from the beginning. When you look at their historical results, they underperform equity ETFs when trading in a reversion to the mean style.
Read this article. It’s about what just happened with ^DXO^. You don’t need this added element of chaos in your trading.
As you have seen in my Daily Battle Plan, the Model Portfolio has done a total of one non-equity ETF trade in the model portfolio in the past year (it was TLT). There were many other non-equity ETF set-ups along the way, but we passed on them. Would we have made money by taking them? Yes, very likely. But knowing what I know, based upon the above two points, steers me away from them in order to focus on equity ETFs, especially country fund ETFs. In my opinion, they’re safer and more predictable than commodity ETFs and better to trade. You may want to apply the same focus onto your own ETF trading.
This is from Larry Connors’ Daily Battle Plan which he publishes each morning. If you’d like to take a free trial click here, or call 1-888-484-8220 ext 1 to start your free trial today.
Larry Connors is CEO and Founder of TradingMarkets.com and Connors Research.