When it comes to choosing exchange-traded funds (ETFs) for your short term trading, what strategy do you use?
Our ETF PowerRatings are based on thousands of simulated ETF trades going back to 2003. This quantified backtesting has enabled us to rate exchange-traded funds on a scale of 1 to 10. Those ETFs with the lower ratings - ratings of 2 or 1 - are exchange-traded funds that are best avoided or sold short. But those ETFs with the higher rating - ratings of 9 or 10 - have performed impressively in our historical testing,
ETFs with PowerRatings of 9 have made significant short term gains more than 77% of the time. ETFs with PowerRatings of 10 have performed even better, making short term gains nearly 80% of the time.
Click here to learn more about our ETF PowerRatings today!
And by combining edges, short term ETF traders can make their trading strategies potentially even more effective. Here's how.
The ETF PowerRating of 9 suggests that this ETF could be ready to move higher in the near term. Note how the iShares MSCI Australia Index ETF ( EWA | Quote | Chart | News | PowerRating) performed at the beginning of the month after earning an ETF PowerRatings upgrade to 9.
We know from our research into exchange-traded funds, the research that formed the basis of our ETF PowerRatings, that the highest rated ETFs - those with ETF PowerRatings of 10 - have performed the best in our simulated testing.
We also know from our research into high probability ETF trading in general - research that extends back to inception for a wide variety of exchange-traded funds - that country ETFs, exchange-traded funds based on national or regional stock markets have moved back and forth between oversold and overbought levels more reliably than other kinds of ETF.
An ETF PowerRatings upgrade from 8 to 9 in the iShares MSCI Sweden Index Fund ETF ( EWD | Quote | Chart | News | PowerRating) was a signal to high probability ETF traders that a potential opportunity was developing in this market.
And because high probability trading - including trading strategies using ETF PowerRatings - is about buying oversold markets and selling overbought ones ("buying the selling and selling the buying"), this makes country ETFs among the most sought after by high probability traders.
Combine this tendency by country ETFs with top ETF PowerRatings of 9 or 10 and you have two significant edges potentially working in your favor as you trade.
Also earning an ETF PowerRating upgrade from 8 to 9 was the iShares MSCI Hong Kong Index Fund ETF ( EWH | Quote | Chart | News | PowerRating), which had closed in oversold territory above the 200-day moving average for three days going into Monday's trading.
Today's report includes three such high PowerRating country ETFs. All three funds have ETF PowerRatings of 9 and are among the sort of high ETF PowerRating fund that traders should be keeping an eye on as the broader markets remain oversold.
Find out more about what ETF PowerRatings can do for you and your trading. Click here to launch your free, 7-day trial to our ETF PowerRatings today.
David Penn is Editor in Chief at TradingMarkets.com.
