Home > Markets, trading > Profitable ETF Trading Strategies: applying short-term market conditions

Profitable ETF Trading Strategies: applying short-term market conditions


It is normal to find trading systems and strategies that focus on particular targets are met set up filters and set up criteria that have been back tested in a variety of market conditions to provide a statistical edge.
 
If you are trading large cap ETFs and large-cap US stocks, you will improve your winning percentages and the size of your average winner if you pay attention to the condition of the market and its short-term context by using Williams%R with a 10 day look back time frame to help you identify short-term opportunities that have favorable reward to risk qualities.
 
Consider focusing on trades that go long when the market is in over-sold conditions. Wait for evidence that price is moving in your preferred direction and then make your entry with a tighter than normal capital preservation stop. In this way you will reduce risk, improve your winning percentage, and make the size of your average winner much larger. You will reduce the time that your position has open risk, which can be defined as the number of minutes in which you have your capital at risk. You should be measuring how long it takes for your average trade to move to a no lose condition.
 

When the market is over-sold and then rebounds in the normal way, that day’s gains are quite often well above average. On those days, it is normal to see many largecaps and broad market ETF indexes all doing quite well with easy entries and powerful one-day moves. On these days, trading seems almost too easy and these are the days that you should be trading actively. By waiting to capitalize on these favorable days to take your maximum risk you’ll add directly to your bottom line as a trader.

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