Why actively trade ETFs?
- Thread starter deronwagner
- Start date
Hi Deron,
I am also very happy from trading ETF. Now I am concentrating to daytrading QQQs with very nice gain. I am in the team with my wife and this two head team generate superior results.
I like QQQ for their huge liquidity, very good reactions to technical analysys and futures.
I plan to swing trade also other ETFs (sectors SMH, BBH, IBB... )later, now I need to make my daytrading plan as much good as will be possible.
I have also quoestion: What is the the biggest amount of QQQ shares which somebody can trade (daytrade) without problems of receiving fills ?
I am also very happy from trading ETF. Now I am concentrating to daytrading QQQs with very nice gain. I am in the team with my wife and this two head team generate superior results.
I like QQQ for their huge liquidity, very good reactions to technical analysys and futures.
I plan to swing trade also other ETFs (sectors SMH, BBH, IBB... )later, now I need to make my daytrading plan as much good as will be possible.
I have also quoestion: What is the the biggest amount of QQQ shares which somebody can trade (daytrade) without problems of receiving fills ?
Hi Deron,
in addition to the ETF's you have allready mentioned which others have daily volume > 300K.
in addition to the ETF's you have allready mentioned which others have daily volume > 300K.
Hi everyone,
It's great to see the interest in trading ETFs. The longer I trade them, the more convinced I am that I will never go back to individual equities. I find my stress level is much lower because I don't have to play games with the specialist or market makers; they simply mirror their respective indexes.
Another trend I have noticed is that the overall percentage of trades that trigger from my newsletter each day is lower than when I was trading stocks, but the win percentage is greater once they do trigger. I'm assuming this is related to the fact that ETFs trend better than individual stocks.
I am also experimenting with arbitrage techniques that can be used when the ETF gets a certain percentage away from the exact mix of underlying securities. I am using TradeStation to test this and will report back as I learn more about it.
I'm writing an article on how to get efficient order execution with ETFs, including order routing and the preferred type of orders. If it is okay with everyone, I will re-post it here when it is completed.
Shorted SPY, QQQ, SMH, and SWH this morning and have just been using a trailing stop to lock in profits as they drop.
Have a great weekend everyone.
It's great to see the interest in trading ETFs. The longer I trade them, the more convinced I am that I will never go back to individual equities. I find my stress level is much lower because I don't have to play games with the specialist or market makers; they simply mirror their respective indexes.
Another trend I have noticed is that the overall percentage of trades that trigger from my newsletter each day is lower than when I was trading stocks, but the win percentage is greater once they do trigger. I'm assuming this is related to the fact that ETFs trend better than individual stocks.
I am also experimenting with arbitrage techniques that can be used when the ETF gets a certain percentage away from the exact mix of underlying securities. I am using TradeStation to test this and will report back as I learn more about it.
I'm writing an article on how to get efficient order execution with ETFs, including order routing and the preferred type of orders. If it is okay with everyone, I will re-post it here when it is completed.
Shorted SPY, QQQ, SMH, and SWH this morning and have just been using a trailing stop to lock in profits as they drop.
Have a great weekend everyone.
Richk,
That's great to hear that you are daytrading the Qs profitably. I have a friend who does exclusively the same thing. Although I do trade the Qs frequently, I also like trading the sector HOLDRs and ETFs because they offer a lot of different opportunities depending on which sector(s) is strong or weak. I have always been a sector trader, but I used to trade baskets of stocks within a sector which sometimes got complicated, especially when I picked the wrong stocks. Now if I want to buy the Oil Service stocks, I simply buy OIH (which we profitably did yesterday, August 22). For swingtrading, it works out great because the diversification factor reduces overnight risk.
Regarding maximum share size on the Qs, I'm not really sure how many shares you could easily daytrade. My friend who I mentioned above regularly trades 20,000 shares at a time. He uses ISLD and gets filled very quickly due to the huge liquidity you speak of. However, he is a scalper and quickly gets out if they move against him more than a dime or so. Beyond that size, though, I really don't know.
That's great to hear that you are daytrading the Qs profitably. I have a friend who does exclusively the same thing. Although I do trade the Qs frequently, I also like trading the sector HOLDRs and ETFs because they offer a lot of different opportunities depending on which sector(s) is strong or weak. I have always been a sector trader, but I used to trade baskets of stocks within a sector which sometimes got complicated, especially when I picked the wrong stocks. Now if I want to buy the Oil Service stocks, I simply buy OIH (which we profitably did yesterday, August 22). For swingtrading, it works out great because the diversification factor reduces overnight risk.
Regarding maximum share size on the Qs, I'm not really sure how many shares you could easily daytrade. My friend who I mentioned above regularly trades 20,000 shares at a time. He uses ISLD and gets filled very quickly due to the huge liquidity you speak of. However, he is a scalper and quickly gets out if they move against him more than a dime or so. Beyond that size, though, I really don't know.
Bilbo,
Here is the complete, inclusive list of all domestic ETFs and HOLDRs that trade an average of at least 300k shares per day as of August 2002 (in no particular order):
QQQ
SPY
DIA
BBH
OIH
PPH
RTH
SMH
SWH
IWM
EWJ
IBB
EWZ
IWN
EFA
IVV
IWD
IWV
MDY
XLF
XLB
This list constitutes the entire realm of ETFs that I select trades from because 300k shares per day is the minimum volume I require. This list will probably keep growing as volume increases from traders and investors who continue to discover the benefits.
I am presently working on a comprehensive list of all the ETFs, grouped together by sector or industry. If you are interested, I can repost the file here when completed (expected around September 1).
Here is the complete, inclusive list of all domestic ETFs and HOLDRs that trade an average of at least 300k shares per day as of August 2002 (in no particular order):
QQQ
SPY
DIA
BBH
OIH
PPH
RTH
SMH
SWH
IWM
EWJ
IBB
EWZ
IWN
EFA
IVV
IWD
IWV
MDY
XLF
XLB
This list constitutes the entire realm of ETFs that I select trades from because 300k shares per day is the minimum volume I require. This list will probably keep growing as volume increases from traders and investors who continue to discover the benefits.
I am presently working on a comprehensive list of all the ETFs, grouped together by sector or industry. If you are interested, I can repost the file here when completed (expected around September 1).
Not sure about which ETFs trade good options. I don't really follow the options too much. I will check around with some of my friends and let you know if I discover anything. Perhaps someone else here can help with that?
Hey folks, if you didnt realize it yet, theres something out there thats better then ETF.
It's the called the emini futures market.
I use to trade stocks, then the ETF now the emini, and let me inform you that I will never go back to trading the ETF.
There are so many advantages to trading the Eminis then ETF,
I'll list the most important ones.
1) commission baby, oh yea I can scalp all day and not worry too much about commission in the eminis. thats if I want to scalp, which I dont usually.
2) Liquidity mama, oh yea! alot more volume then the ETF!
3) Leverage! badda bam badda boom. 1 point in the emini is $20 in the nasdaq emini and $50 in the S&P emini
4) you only need an account of 4k to be able to generate as much income as a 30k account in the ETF.
This post has been intentionally humour, but the fact is that the EMINI point an click just outclass the ETF.
To the less inform, I hope this helps you, and you can better make a decision with all availiable facts given.
Live long and trade with prosperity
It's the called the emini futures market.
I use to trade stocks, then the ETF now the emini, and let me inform you that I will never go back to trading the ETF.
There are so many advantages to trading the Eminis then ETF,
I'll list the most important ones.
1) commission baby, oh yea I can scalp all day and not worry too much about commission in the eminis. thats if I want to scalp, which I dont usually.
2) Liquidity mama, oh yea! alot more volume then the ETF!
3) Leverage! badda bam badda boom. 1 point in the emini is $20 in the nasdaq emini and $50 in the S&P emini
4) you only need an account of 4k to be able to generate as much income as a 30k account in the ETF.
This post has been intentionally humour, but the fact is that the EMINI point an click just outclass the ETF.
To the less inform, I hope this helps you, and you can better make a decision with all availiable facts given.
Live long and trade with prosperity
Yes, there are a lot of great reasons to trade the e-mini and many of my friends do that too. I personally prefer the ETFs because a majority of my trades are swing trades (not scalps) and I also like the diversity afforded by being able to trade various market sectors. To each his own I guess.
Deron
Deron