5 Simple ETF Trading Tips

5 Simple ETF Trading Tips
News from Seeking Alpha:

The growth of the ETF universe has spawned a number of ways to tap into a variety of asset classes that were previously out-of-reach for mainstream investors. Thanks to the numerous (and growing) number of advantages that ETFs offer over traditional mutual funds, it’s no wonder that the exchange-traded product structure has become the preferred vehicle for many traders; ETFs are useful in implementing any number of investment strategies, ranging from short-term trades to building retirement portfolios.

Nonetheless, these innovative financial instruments are far from foolproof and there are more than a handful of opportunities to make mistakes when trading ETFs. Below we outline five simple, but often times overlooked, tips to consider before executing your next ETF trade:

1. The Trend Is Your Friend

You have probably run across this expression in a financial news article before and you have certainly heard it more than once if you talk to any technical traders. What exactly does it mean? A trend is simply the prevailing price momentum for a given security. In other words, this is the general direction of where an ETF is headed. The trend being your friend simply means that you are better off sticking with the prevailing direction of the ongoing trend (whether it is up, down, or sideways)…………… continues on Seeking Alpha

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