ETF Swinger
Take advantage of the commodity and currency boom/bust through
easy to trade Exchange Traded Funds (ETFs)
When
ETFs first rolled onto the scene in the 90's, all you could do
was trade the major indices like the S&P 500 and a few sectors
of the US stock market. The problem is that the majority of
stocks move in the same direction (even non-US
equities)...there's no true diversification.
In
order to be diversified in several different markets, fund
managers have been trading things such as gold, oil, cotton,
bonds, and currencies for decades.
Fast
forward to 2004. Gold begins trading as an ETF, which means you
can buy gold just as easily as you would a stock. In fact, the
ticker is simply GLD.
By
2007, you could finally trade all major currencies, bonds,
grains, oil, silver, natural gas, base metals, and silver.
Years
ago, I created a trading system that takes advantage of
over-bought and over-sold conditions in these markets. With so
many ETFs to trade now, I decided to see how the system would do
on these new ETFs. The results have been fantastic:
Yearly Performance Summary
| Year |
Days |
Closed Balance |
End Total Equity |
Total Equity Gain |
Gain % |
# Trades |
 |
| 2007 |
365 |
$129,236.62 |
$129,992.14 |
$29,992.14 |
30.0% |
15 |
| 2008 |
118 |
$178,936.38 |
$178,936.38 |
$48,944.24 |
37.7% |
13 |
Win/Loss Statistics |
|
|
| Wins |
20 |
71.4% |
| Losses |
8 |
28.6% |
 |
| Total |
28 |
100.0% |
|
|
| Winning Months |
15 |
93.8% |
| Losing Months |
1 |
6.3% |
|
|
| Total |
16 |
100.0% |
|
|
| Average Risk Percent |
7.62% |
| Average Win Percent |
1.70% |
| Average Loss Percent |
0.48% |
| Average Win Dollars |
$4,444.59 |
| Average Loss Dollars |
$1,244.44 |
| Average Trade Percent |
1.08% |
| Average Trade Dollars |
$2,819.16 |
|
|
| Profit Factor |
8.93 |
| Percent Profit Factor |
8.80 |
| Expectation |
0.14 |
How to Trade ETF Swinger
Trading the system is very easy. We give you a limit order to
buy (or sell short) the next day. The limit order is the worst
price we are willing to be filled at. Typically, this price will
be higher than the close...which means you will more than likely
be filled around the opening price the next day.
When
it comes time to sell, you will be told to sell at the close of
the next day. There are no stops. We get in and out over a fixed
period of time (typically 4 days). Only one position (long or
short) is held at any time. That's it. Like I said, very simple.
Example:
Buy
FXE at a limit of 157.30 (You would buy at or below 157.30 the
next day)
Sell
FXE at the close (You would sell FXE at the end of the session)
ETFs Traded
|
Commidities |
DBA |
Agriculture |
| |
GLD |
Gold |
| |
USO |
Oil |
| |
SLV |
Silver |
| |
UNG |
Natural
Gas |
| Bonds |
SHY |
1-3 Year T-bonds |
| |
TLT |
20+ Year T-bonds |
|
Currencies |
FXA |
Australian Dollar |
| |
FXB |
British
Pound |
| |
FXC |
Canadian
Dollar |
| |
FXE |
Euro |
| |
FXF |
Swiss
Franc |
| |
FXY |
Japanese
Yen |
| Indices |
SPY |
S&P 500 |
As
more ETFs emerge, and enough volume is traded, I'll add more to
the list. Please note that there are hundreds of ETFs out there,
but almost all of them are correlated to the S&P 500...which is
what we don't want.
Click here for instant access to your free
trial
The results listed herein are based on hypothetical trades.
Plainly speaking, these trades were not actually executed. Hypothetical or
simulated performance results have certain inherent limitations. Unlike an
actual performance record, simulated results do not represent actual trading.
Also, since the trades have not actually been executed, the results may have
under (or over) compensated for the impact, if any, of certain market factors
such as lack of liquidity. You may have done better or worse than the results
portrayed.
