Looking for leveraged ETF strategies in all the wrong places?
Take a look at how the ^DGP^ performed shortly after earning a Leveraged ETF PowerRatings upgrade to 9.
And here’s how the ^ERX^ behaved in the days after its Leveraged ETF PowerRating was upgraded to 9.
Let’s not forget the country/regional ETFs. Consider this post-Leveraged ETF PowerRating upgrade rally in the ^EET^.
These short term gains in leveraged ETFs are typical of the results we have seen in our extensive, quantitative backtesting in more than a 100 double- and triple-leveraged exchange-traded funds. What this backtesting reveals is that the same “buy the selling, sell the buying” strategies that make PowerRatings work for stocks and regular exchange-traded funds (ETFs) also works for leveraged ETFs.
Click here to launch your free 7-day trial to our Leveraged ETF PowerRatings.
Leveraged ETFs provide traders with a number of different ways to take advantage of different market conditions. As I wrote yesterday in “PowerRatings, High Probability Trading and Bull Markets,” (click here if you missed it). I pointed out that one of the ways that leveraged ETFs can be effective is when markets are running away to the upside and inverse leveraged ETFs are becoming more and more oversold. Often, these inverse leveraged ETFs can become significant bargains after reaching oversold extremes.
The fact that leveraged ETFs include not only equity-based leveraged markets but commodity markets as well provides additional opportunities for short term traders. As the example of DGP above shows, leveraged commodity ETFs are also capable of making significant moves higher after earning top Leveraged ETF PowerRatings of 8 or more.
Leveraged ETFs are not for everyone. Leverage is a tool for advanced, disciplined traders who know, understand and appreciate the role leverage can play in helping traders maximize edges in the market.
But if you have been looking for ways to trade leveraged ETFs – from the ^SSO^ to the ^FAS^ – using quantified, backtested trading strategies, then be sure to click this link to learn more about what Leveraged ETF PowerRatings can do for you and your trading.
Leveraged ETF PowerRatings. Quantified. Backtested. Free for a Week. Click here to learn more.
David Penn is Editor in Chief at TradingMarkets.com.