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ETF Day Trading: Pitfalls and Success Strategies Explained
When day trading popular, volatile exchange traded funds, traders seek to capture small moves that occur primarily during the first hour or so of each trading day. The challenges in day trading the ETFs are that a) you need to take time to carefully understand how far these move during each day and b) how to set specific entry and exit criteria.
Day trading the ETFs is, to a degree easier than day trading some stocks, because you know the average trading ranges that each is most likely to move ahead of time. The trick is trading within the pivots to capture small, consistent wins as they move each day, and to be on the right direction of the market when day trading ETFs like the ones we discuss.
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In the QQQQ chart below, for example, you can see how an intraday "cup" pattern revealed a potential breakout long play for this ETF during the first hour of this trading session. This is just one of many patterns you should know about for day trading ETFs (see ETFMastery.com for more patterns):
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Day Trading Exchange-Traded Funds: Myths and Tips
Some say that day trading ETFs is difficult because they are choppy. This is certainly true, for those that have not been trained in the proper way to day trade ETFs.
Newer traders, including those to ETFs, should start with small-share swing trading, instead of trying to navigate the oftimes-challenging intraday charts.
The key is to study the ETF patterns daily til you start to see for yourself how far each one will move in a single direction before pivoting (say .3 of a point vs .8 of a point, depending on the specific ETF), as well as the daily ranges and other signals.
For more, see our new ETF Mastery home study course. |
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