I trend-follow currently-cheap countries (ETFs representing foreign stock markets) and commodity indexes (like SLV and energy-related ETFs). I usually hold a few weeks. Anyone doing the same? If so let's exchange ideas on things like up-and-coming investment prospects, and knowing when to sell.
Anyone position-trading emerging markets or commodities?
- Thread starter Steve Ladd
- Start date
Have you considered automating yourself alerts at the very least of what markets you interested in trading? Few weeks is not close to the term I stay in Commodities-I stay in years and many rollovers. I stay away from light trading instruments and don't trade any that don't have options unless getting out today or up to four days. Matter of fact, if I am going to buy the underlying to hold for months/years, not going to be an ETF but rather a stock that paying over 4% dividends, will trade lesser dividend stocks for shorter durations but usually doing covered calls or quick 1-3 day moves, along the lines of automation. Long term, am mainly Monthly/weekly chart trader.
What would you consider position trading? I think of myself as a swing and occasional position trader. I am in trades for as little as a few days but typically weeks and often times months. I just depends when my signals tell me it's time to move on.
As far as commodities I have been trading GDX, a couple oil stocks, and looking to add to small positions in XLI, XLB, and similar stocks and ETFs. However, I am almost exclusively into technical analysis and trend following. I watch the news to a degree but pay very little attention to fundamentals and the news flow for my trades. I know many people on Elitetrader.com think the way I trade is sheer BLASPHEMY but it works for me and I have been significantly beating the market. I may share some ideas but not my system.
I am always interested in learning from others and don't mind sharing ideas buy will not share too much on specifics.
Speaking tripples, EDC has some juice but I go with EEM when I buy emerging markets.
I have views sometimes but always look for standard price swing points.
I don't do alerts. I just check my list every couple days using multiple time frames. Years? Do many trends last that long? You must be very trusting of fundamentals or patient of price setbacks. What do you mean by "light trading instruments"?
I would hold for years if I found a trend that lasted that long. Typically they violate my "trend is still good" criteria after weeks or a few months. I have been trading GVAL, EWZ, EWZS, ERUS, SLV, VGPMX, VDE, GSC, and VWOB. I am currently in all these except SLV. I may add EWH, EPOL, and KOL.
I trade futures and check out last nine years, so I wait till prices get in upper/lower 25% of nine year ranges, I try to stay in all of the time and try to so stop and reverse, but finding extremes of moves often takes multiple attempts and why I hedge. Longest trade was in Copper and took over 5 years, but now I have learned how to add on and many inter moves using options for time decay or when time for cycled moves counter to trend and do mixture of hedging open profits and more time decay options till retracement is over.
Light as in volume.
A decent, two transaction per year strategy has been to use the "Sell in May" tactical factor combined with a risk profile variable / determinant for forward one year return. An equal position of Emerging "small cap" * and an equal position of "U.S. small cap value" ** universe ( exploiting Fama & French size, value factors ) for the 1st leg, and the utilities sector or cash for the other. As one never knows when either the emerging or the U.S. markets will be "outperforming", the blend of the two has helped alleviate that uncertainty while providing diversification while exploiting small cap premium and mitigating risk ( risk profile ). The spreadsheet shows how the buy and hold exposure to emerging underperformed during 2000 - 2015 while the combination returned 700 bp CAGR higher ( strategy B ). Using emerging small cap only in the 1st leg ( strategy A ) has produced higher alpha, albeit with more volatility.
* DFA Emerging Small cap (DEMSX)
** DFA U.S. Small cap value ( DFSVX ) or Vanguard small cap value ( VBR )
* DFA Emerging Small cap (DEMSX)
** DFA U.S. Small cap value ( DFSVX ) or Vanguard small cap value ( VBR )