There are five main steps that go into successfully day trade ETFs. They are:
1. The longer term direction of the trend. You want to day trade in the longer term direction.
2. The shorter term direction of the trend. You want the ETF to have pulled back.
3. The intraday pullback of the ETF (the bigger the better)
4. The proper exit strategy, meaning with a stop, scaling out, or exiting at the close.
5. Quantify, Quantify, Quantify. You want to make sure the strategy has historically done well on a universe of at least the 100 most liquid ETFs and has also held up well in 2008 and in the rising market years.
Correctly putting these five main steps together has historically led to healthy edges on both the long side and the short side in day trading ETFs.
80% correct in ETF trades since October 2008, Larry Connors’ Daily Battle Plan includes incisive market commentary, charts of the day, a Model Portfolio of past trades and daily pre-market audio commentary to help traders prepare for the trading day. For a free, 7-day trial to Larry Connors’ Daily Battle Plan, click here or call 1-888-484-8220 ext 1. today.
Larry Connors is CEO and Founder of TradingMarkets.com and Connors Research.