Swing Trading and Day Trading ETFs – Large Position Sizes Are Not Absolutely Necessary

Contrary to popular belief you don’t need to trade big share sizes to make a decent amount of money in the market.

In addition to trading for a living, I manage subscription based educational service called the Swing Trade Playbook. The idea behind the Playbook and this blog is to educate individuals about ETFs, trading, swing trading and day trading.

Every weekday night my Swing Trade Playbook outlines my trading plan for the next trading day. By doing this, I allow individuals to “peek over my shoulder” and see tomorrows trading plan today!

Today’s lesson, you don’t need to trade large size to earn a good living swing trading. The image below shows the positions my Swing Trade Playbook shared with subscribers about one week ago. As you can see the largest position is only 1,136 shares and if you were to enter the positions your unrealized P&L would be pretty close to $21,000 with an initial risk of approximately $7,000 (a 3 to 1 reward to risk ratio).

I wanted to show this since a potential subscriber emailed and asked how I can make any money trading small share sizes.

If you would like to learn more about my Swing Trade Playbook go to my website http://etfupdater.com/examples.

Mike Matousek, CMT
Portfolio Manager, ETF Updater
http://etfupdater.com

Swing Trading the Best and Worst ETFs

This weekend an individual wanted to learn how we trade ETFs.

I’ll start by saying there is no one Holy Grail in trading and to be successful traders only need to understand a couple of strategies.

The core strategy behind my method is to purchase ETFs during pullbacks and short ETFs during rallies. I feel my method offers less risk than traders buying breakouts and selling break downs since the majority of the trades are entered during either “oversold” or “overbought” conditions.

As many of my subscribers noticed I don’t have many breakout plays in my ETF Swing Trade Playbook and here is why:

Contrary to the “inexperienced” traders’ belief, the majority of breakouts are unsuccessful! Sure, it is easy to look at a chart and identify the best breakout points that happened in the past, but what most inexperienced traders fail to notice is how many breakouts fail – maybe this is why most inexperienced traders are unsuccessful.

Breakouts, the successful ones, don’t happen as often as people think. Realistically, there are only a few times each year an individual sector actually has the opportunity for a good breakout to exist.

Breakouts have greater risk. If a trader believes in trends, support and resistance levels the actual price in which the trend is broken, the stop loss price, is much farther away from the entry price on breakout trades. Therefore, to give the trade the opportunity to work the “wiggle” or stop loss level has to be larger than the “wiggle” for pullback strategies.

The majority of newsletters generally focus on breakouts, since my Swing Trade Playbook focuses on pullbacks and rallies, not only can subscribers diversify their trade discovery tools, but subscribers get see the trades I anticipate doing the day before I do them along with original and uncommon trading methodologies.

Sure, I do trade some breakouts, but they are not my core strategy since, technical analysis research has shown breakout type strategies fail more often than succeed. Generally, wait for the breakout to happen, confirm itself and then I buy the pullback.

I have an educational book called Swing Trade Fundamentals it details the how and why concerning finding trades, determine the correct amount to shares to purchase, determining entry points, exit points and much more.

If you would like to learn more about swing trading, day trading and investing feel free to sign up for our free weekly swing trading educational newsletter at http://etfupdater.com or click here.

Mike Matousek, CMT
Portfolio Manager, ETF Updater
http://etfupdater.com

ETF Swing Trading – Good or Bad? Depends Which Side of the Market You’re On!

The ETF Sector Rotation Strategy (our strategy for longer term investors) lost ground today, but the positions are still in positive territory.

The Swing Trading Playbook has been hitting it out of the park all week. We had very few trading signals since the positions entered earlier in the week are working great. The Playbook is up about 4.5% for the week and holding a few unrealized gains over the weekend and into next week.

It looks like Monday may be the time to hedge the portfolio or start ringing the register on few positions.

Here is a screen shot of the open positions for the Swing Trade Playbook. As you can see, huge positions are not necessary to make money swing trading. The key this week was keeping the losses small and letting the winners run.

To learn more about how you can benefit from us visit http://etfupdater.com/.

Have a good weekend!

Mike Matousek, CMT
Portfolio Manager, ETF Updater
http://etfupdater.com/

ETF – Professional Technical Analysis and Money Management Organizations

I believe, to stay on top of their game, money managers must constantly evaluate new market concepts, revisit old trading journals and network with their peers.

To accomplish this task, I belong to a few professional organizations. One of which is the Market Technicians Association (http://mta.org/) and I joined for a few reasons:

1. To learn more about technical analysis to improve my personal trading
2. To meet other professional Market Technicians
3. To help promote the use of Technical Analysis

To Learn more about the MTA click here and to learn more about what a market technician does click here.

Another organization I belong to is the National Association of Active Investment Managers (NAAIM) to visit the organizations website click here.

Each organization has a different focus, but together, they combine the knowledge, insight and camaraderie I feel a money manager needs to succeed.

If you have any questions or would like my opinion about how you can benefit, feel free to contact me. For our contact information click here.

Michael Matousek, CMT
Portfolio Manager, ETF Updater
http://etfupdater.com/

ETF Swing Trades – Swing Trading Playbook

Contrary to a lot of individual’s beliefs, traders using a swing trading approach do not need to make trades everyday to be successful.

For example, the image below shows the ETF symbols that triggered a possible short sell signal (we emailed this list to subscribers to the day before a swing trade signal could be generated). If you are following the markets and our posts closely, today was the first time any of the ETFs had a net positive day since the signal was generated. This is good, since the ETF Swing Trade Playbook showed these as a short sell opportunity. That means if they go down we were correct in our directional bias.

Here are the ETFs that didn’t get stoped out since the “playbook” was issued on December 10, 2007.

If you want to know what ETFs and swing trades I’m planning for the next trading day visit us at http://etfupdater.com/. We have a trial offer for $19.99 until the end of the year, then it goes to $49.99 per month.

Mike Matousek, CMT
Portfolio Manager, ETF Updater
http://etfupdater.com/

Swing Trading and Day Trading, Unknown and Overlooked Differences

I’ve been asked numerous times, what do Swing Traders do and how are they different than Day traders. First, I should start off by saying there isn’t one best way to trade, but it seems almost everyone has an opinion about which way they feel is best.

In the past I would either day trade or swing traded exclusively, but now 90% of my trades are swing trades and the other 10% are day trades. My experience as taught me that combining the two styles offers me the opportunity to capitalize on different market opportunities other traders may pass up.

There basic differences between day trading and swing trading are:

o Time in Trade
o Risks
o Margin Advantages

I’ve been asked numerous times, what do Swing Traders do and how are they different than Day traders. First, I should start off by saying there isn’t one best way to trade, but it seems almost everyone has an opinion about which way they feel is best.

In the past I would either day trade or swing traded exclusively, but now 90% of my trades are swing trades and the other 10% are day trades. My experience as taught me that combining the two styles offers me the opportunity to capitalize on different market opportunities other traders may pass up.

There basic differences between day trading and swing trading are:

o Holding Periods
o Risks
o Margin Advantages

Time in Trade

Swing Traders generally hold positions for days or weeks and the holding period is generally determined from the stocks trend as opposed to the market’s hours for day trades.
Day traders generally start and end the day without any positions in the account. In doing so, the risk of holding overnight positions that open adversely to the trader is mitigated, which is true, but there are a few other risks many day traders don’t think about.

Many people think day trading is less risky since they do not hold positions overnight. In my opinion, this is far from reality since most of the day trading proponents never talk about “commission risk”.

Commission Risk
The risk that the cost of commissions can significantly impact the traders account. I’ve been in this business quite some time and have seen individuals gross $250,000 per year trading and pay $300,000 in commissions producing a net loss of $50,000 for the year. So, if you are going to day trade, keep in mind the risk least talked about, COMMISSION
RISK.

Opportunity Risk

The risk that a better opportunity may present itself after a decision has been made. Traders need to realize if they are going to swing trade, which generally requires more capital than day trading they are more susceptible to opportunity cost. I can find quite a few swing trades per day, but since capital is limited I need to reduce my opportunity risk by screening all possible swing trades for the best opportunities.

Margin (What is Margin)

Day trading does give some traders an advantage, buying power. If an account qualifies to be a day trading account the broker dealer may offer the trader 4 to 1 intraday leverage instead of the industry norm of 2 to 1. Keep in mind, depending on the day traders experience and profitability this can help traders produce greater returns or losses.

Feel free to send me an email if you have any questions.

Until next time take care and trade smart.

Mike Matousek, CMT
Portfolio Manager, ETF Updater
http://etfupdater.com

ETF Investing & Swing Trading – New Swing Trading Tool

Good morning, the Dow Jones Index futures are down approximately 70 points, the DIA ETF is bid @ $132.55 (yesterday’s closing price was $133.30) and we have been short since Friday.

Most of the money made in the markets generally comes from sitting on your hands and letting your positions work, today we would like to mention a new tool swing traders can benefit from.

Our trader is constantly asked by friends, family and other individuals how he does what he does, what tools he uses, how he uses each tool and if they can watch him trade. Our website http://etfupdater.com/ created a service called the Swing Trade Playbook.

The service allows individuals to get a glimpse of our trading plan BEFORE for the next trading day. We aren’t familiar with any other services that let individuals see an actual trader’s plan the day before any trades happen.

The trader’s wing trading plan consists of :

– The ETFs He Anticipates Trading Tomorrow (ETF Buy Sell Ideas)
– Both Long and Short Ideas so traders can capitalize if the market goes up or down
– ETF Entry Points
– ETF Exit Points (inital stop loss prices)
– How Many Shares He Anticipates Trading To Balance Each Trades Risk
– Thoughts about the market
– Technical Analysis Ideas

The introductory rate for the service is $49.99 per month. As the subscriber base increases the price will increase to $99.99 per month. We anticipate on raising the price to new subscribers so we can maintain exceptional service for the original subscribers.

For more information visit us at http://etfupdater.com/ or click here.

Mike Matousek, CMT
Portfolio Manager, ETF Updater
http://etfupdater.com/