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Questions from an ETF Newbie

(3 posts)

  1. stott2
    Member

    I posted this on an older article so I don't know if it will be seen.
    1.. Do we strictly follow where the ETF line is in relation to the 200 day MA? If the line barely goes above the 200 MA we buy. If it falls only 1-2% and this places it barely below the 200 MA, do we sell? And the reverse would be if the line of the ETF barely goes below the 200 MA we sell. If the next day it barely goes above the 200 day MA, do we buy? It seems that if the market seasaws back and forth in a certain range for a while, we could be getting in and out of the market a lot.
    2. Is the 200 day ema the only one we follow? I saw mentioned in one article that if the line falls below the 50 day MA that we just need to be aware but only sell if it falls below the 200 day MA. So, we really don't pay any attention to the 50 day MA? Some commentators suggest not investing until the line crosses above both the 200 and 50 day MA.
    3. One conservative commentator likes to follow the 10 month SMA. Any thoughts?
    4. For most of you, if your ETF falls below the 200 day MA and you sell, is there much change you will continue to watch this same ETF and get back in when it goes above the 200 MA? Or will you always look for a different ETF?
    5. If allowable, I would like to get a list of maybe a dozen good diversified ETFs that fit the investment recommendations presented on this website and have worked for you.
    6. Today is Saturday Aug. 8. Yesterday the market went up a good amount. Since most ETFs are above their 200 MAs, if I follow the plan, I should get in on Monday. But many commentators are screaming that the market is overbought and it needs a correction. I sure would hate to get in on Monday morning, have a correction that day.
    Thanks.

    Posted 3 months ago #

  2. Donato
    Member

    Hi stott . . .
    Using only a trend line will most likely give you results you are not happy with. But using too many indicators can just get messy.

    Knowing where the levels of previous support and resistance are might be the single most important "indicator" for me. Trend lines take on more importance once you know these.

    And perhaps most interesting to me is the first sentence under your number one where you mention the "ETF line". If you are looking at charts with the equity plotted as a line, you are missing out on a lot of information. Try learning and using candlesticks. The difference is similar to the difference between writing a letter and talking on the phone.

    Learning candlesticks can be as complicated as you want to make it. But if you are new to them, a few weeks study will be well worth it to get you started. Then using candlestick charts, with levels of support and resistance plotted, combined with trend lines will actually have some more meaning.

    If you haven't viewed a chart using candlesticks before, here's a link to give you an idea: http://finance.yahoo.com/q/ta?s=moo&t=6m&l=off&z=l&q=c&p=m50%2Cm200&a=&c=

    Regarding strategies, well, there are books written on that subject . . .

    Posted 3 months ago #

  3. Donato
    Member

    EDIT FOR ABOVE . . .
    Substitute moving average for trend line in my reply above. I was a bit tired when I wrote that.

    Posted 3 months ago #

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