At ETF Trends, we typically advocate adhering to a trend following strategy in all seasons and market conditions. One should keep an eye on the trend so that if your ETF declines below its 50-day average, it is not a good sign. If the same ETF declines below its 200-day average, it is time to sell.
The first and perhaps most important screening process for ETFs is knowing the 200-day moving average of each ETF investment and where it stands in relation to it. We advocate investors should only invest in ETFs trading above their 200-day moving averages.
We look for uptrends, and then examine those trends using fundamental analysis. Once a position is entered, we stay in the investment until the trend turns sour or declines below its trend line.
For more information on the trend following strategy, visit our trend following category.