For many traders and active investors, trading exchange-traded funds may be daunting. But trading leveraged ETFs is a real challenge.
Fortunately, many of the same principles that guide objective, data-driven short-term trading in stocks hold true when it comes to trading ETFs and leveraged ETFs. In fact, once active investors adopt their trading strategies to accommodate the relatively less volatile world of exchange-traded funds, they typically find ETF trading to be a welcome addition to their overall suite of trading and investing strategies.
Simply by knowing when a fund has reached levels where buyers have historically found the ETF attractive can provide short term traders with a real edge. For example, our ratings system picked up growing positive edges in the Direxion Financial Bear 3x Shares (NYSE: FAZ) early in the second half of December.
And by scaling into the fund, half when the ETF earned its initial “consider buying” rating of 9 out of 10, and the other half when the fund both closed lower and earned a further ratings upgrade to our highest level of 10 our of 10, traders were able to take advantage market weakness for a solid, year-ending, single trade gain of more than 4%.
To learn more about trading exchange-traded funds using scale-in strategies like these, click here.
And to start trading ETFs using PowerRatings, click the link below to start your free, 14-day, no obligation trial.