TradersStudio can help you build stock and ETF trading systems. Building systems is not as complex as many people think. There are some general guidelines and components that can be used as building blocks for your own system development. Some systems have historical results that achieve return rates of 20% or so per year. While this is no guarantee of future results, it does show the potential of designing quality systems.
We have discussed how to build stock and ETF trading systems in one of our tutorials. We also have taken a look recently at using intermarket analysis to improve these types of systems. One of the great things about using ETFs is that many indexes have short ETFs so we can simply use buy signals on the long and short sides of the system. You can see an example of that in Trading DOW Tracking ETF’s DIA and DOG .
The biggest key to building stock and ETF trading systems is adaptability. ETFs provide an excellent mechanism for adapting to market conditions. Because they can be traded on the exchange, they have high liquidity, but since they are targeting some specific sector, ETFs provide resiliency that standard stocks cannot. Therefore, when considering the adaptability of your systems to a wide-variety of market conditions, consider testing against ETFs.
It is important to extensively backtest your stock and ETF trading systems. Backtesting means you run your developed system against historical data to see what its performance would have been. Using CSI data, TradersStudio can be used to research and develop trading strategies that can be traded at any brokerage. With CSI data, we can use the TradersStudio stock format which correctly provides dividend-adjusted and split-adjusted data. This allows TradersStudio to provide the most accurate backtested results in the industry.
Computerized Stock and ETF Trading Systems
Today’s 8 and 16 core computers can provide an incredible amount of power for designing new systems. TradersStudio Turbo can provide trading signals on our reports to let you know when to trade and which trades to make. There is no need to actively monitor the stock market or keep glued to a computer screen. Simply load up TradersStudio and you can run your strategies against the latest CSI data. With Turbo you can run strategies that just a few years ago would have been considered too computationally expensive to run on all but the fastest machines. Now, those strategies can be run on your laptop or desktop computer. These computerized systems also have a hidden psychological advantage too. By following a system (and sticking with it), it helps keep objectivity in trading.
Example ETF Trading Systems
There are many publicized stock and ETF trading systems that can help you learn the fundamental building blocks of trading. For example, an article on Yahoo Finance shows three simple momentum ETF trading strategies. The three strategies that are listed are:
- Relative Weakness Momentum Strategy
- Momentum Indicator – Bullish Momentum
- RSI Strategy – Neutral to Bullish Markets
These are certainly not the only strategies that can be run, nor are we saying these are profitable. However, understanding the wide variety of indicators and strategies that are available are necessary to designing robust systems that work both in the long and short term.
History is Important
When testing stock and ETF strategies against market conditions, historical data is important. Similarly, history is important with the software you use. TradersStudio has been around for 13 years and was chiefly designed by a real trader, Murray Ruggiero, that has been in the business for over 20 years. He has made his life in the trading world – through bull and bear markets. Murray knows the pitfalls that traders make and what successful traders do right because he has seen it all. This means that when you’re looking to build your strategies, you should know that you can trust TradersStudio to provide you with the resources and accuracy necessary in these markets.