One of the hottest yet often overlooked stocks to trade are called ETFs. ETFS, or exchange traded funds, are securities that represent different indexes or a select group of stocks. But sometimes these funds can be hotter than the stocks they carry. With their high volatility and high liquidity, ignoring these could mean potentially giving up on the biggest trade of your week or your month.
Alternative Approach to the Market
Every trader is different. Whereas some traders might love to trade AAPL every day, others might prefer trading the overall market. Trading ETFs such as SPY, QQQ, or IWM would be the way to go. By trading these just like equities, traders can capitalize on moves from the S&P 500, the NASDAQ, or the small cap Russel 2000. These ETFs represent their distinct underlying securities by aggregating the behavior of major stocks in their fields.
Sector ETFs
But that’s not all. Have you been following the global trend for promoting climate control and clean energy? Then you might see a promising future in the solar industry. The only problem is you’re not sure which company will be the one to come out on top. Will it be Solarcity, First Solar, or Sunpower? Well, you can just trade TAN. TAN is the ETF that reflects the progression of entire solar industry by averaging the pricing of the major solar companies. A quick search will yield ETFs for all industries such as biotechnology, utilities, financials, and more.
Higher Leverage
Or if you’re a daytrader, you might be attracted still to ETFs for its high liquidity and volatility. See there are certain ETFs that are double or triple leveraged representations of their indexes. This means that the price volatility of this ETF moves double or triple the price fluctuation compared to its original index. A prime example is JNUG a triple leveraged security reflected the price action of gold.
But the best part of trading ETFs is that they trade exactly like any other securities. All of the rules we teach in our bootcamps apply to ETFs as well. Make sure to follow the trend, align multiple timeframes and manage your risk. Remember all proper trading techniques can be applied across these different securities including equities, cryptocurrencies, and futures.
Live Webinar Wednesday July 27th at 8PM ET
I’m going to be doing a live webinar on Wednesday July 27th, at 8 PM ET titled “Trading Secrets Revealed: How To Bank Trading ETFs With Market Volatility”. The topics include:
- How to time ETF trades with market volatility
- How to capitalize from leveraged ETF’s
- My goto ETF pairings + some trade examples
Make sure to reserve your seat here.
