Investors may have heard the phrase, “the trend is your friend.” In rising market trends, an investor would ride the upside, but if the trends weaken, it may be time to sell or shift into safety. [Factors To Look For In An ETF Retirement Portfolio]
At ETF Trends, we like to use the 200-day exponential moving average to provide a general guideline for ETF trades. For instance, if an ETF moves above its 200-day trend line, it is a buy signal. However, if the ETF dips below its long-term trend line, it may be time to let go of the position. [An ETF Trend-Following Plan for All Seasons]
For more information on ETFs, visit our ETF 101 category.
Max Chen contributed to this article.