🔬 Understanding ETFs
How ETFs can be great trading stocks ... they are best for:
🎿 quick trades (intra-day scalps)
🥁 all day holders (trend trades)
Let's use TZA as an example here ... following an analysis done last week where most patterns in play I called the Trump Pattern. These are stocks that have gotten "crushed" as the DOW soared from 17,000 to 21,000 over the last 60 days. There are some really great chart patterns in play now as stocks are rebounding back up "doing the dead cat bounce"
These stocks make great day-trade and swing trade opportunities in a top heavy market. If you watch a few key indicators, you can ride it up as the market is going down. And right now, there is tremendous upside potential for TZA to fill in the gap back up as its now doing. The next one to follow right behind is UVXY ... see the similarities in the charts ... UVXY due for the big green bar up.
Another one to follow I really like here is LABD ... see chart ...
When I trade ETFs, I watch 4 indicators. First, ETFs the UVXY and TZA are leveraged ETFs at 300% the daily movement of their respective indexes. The UVXY follows inverse of S&P 500 and TZA for the Russell 2000. When the S&P 500 goes down UVXY goes up and vice versa.
I keep those market indexes on my screen. Second, I watch other markets like the DOW, and the Nasdaq. These markets provide indicators of the strength of the overall market and are helpful predictors of where it is headed. Third, I watch for major players in the market that influence the direction of the market like Google GOOG and Apple AAPL. Often when they move together, the market follows.
Fourth, I watch the stochastic indicators on the 2 min and 5 min chart to give me a good entry price. Go back and analyze how TZA has moved with those stochastic indicators. See how your trade would play out if you had invested when the stochastic bottomed out and sold when the stochastic rolled over the top ... a move I teach in MOJO University Courses called the RAIL GRIND ... made a cool $.40 cent extra profit riding out this UVXY trade 💵
Of course, these aren't the ONLY indicators. Among other things, politicians can make this stock really spike! Potential good news out of Washington can send it plummeting.
You get a high volume liquid stock when you trade these type of ETFs. As a day-trader, you can get in and out pretty quickly trading between 500 shares as a minimum and 10,000 shares and up even. If you want to make money trading as the market goes down without shorting anything, take a look at this affordably priced and quickly moving ETF called UVXY.
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This is great for beginners and experienced traders. We trade UVXY, NUGT, LABD, TZA quite often and those looking to advance their skills in trading ETFs can learn from what happens in the chat room.
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