Steps To Creating a Medium-Term ETF Trading Strategy?


Junior member
Hello, All!

I've been investing for a while, and my portfolio is mostly in lazy ETF strategies. I'm looking to take a small amount of my portfolio and develop a more active trading strategy with it. I'm planning on working with commission-free ETFs, as trade costs are minimized, and there are no tax consequences, as I'll be trading long only in a tax-advantaged account.

So my question is, what resources can you recommend that will help me learn more about this sort of project? (I'm not asking for you to "give" me a strategy, but to point me in the right direction). I see a ton on Google about day trading, and long term investing, but not as much about medium-time-frame trading. I've done a bit of reading, and I suppose that my style leans more toward a trend or momentum style, at least right now.

I've done some thinking, and here are some attributes of what I would call a perfect trading strategy:

1) Simple--I don't want to have 100 indicators to keep track of.
2) I'd like to spend less than an hour a day on my trading. I do have a life ;-).
3) Trades with a medium time frame (say 4 weeks or longer)
4) No super fancy indicators. I'd like to be able to do everything on the Fidelity charting system if possible.
5) I'm willing to invest in trading education, but no going to so-and-so's web site for the sure-fire $1500 trading course.
6) Understandable--no mystery systems. I'd like to understand the theory behind the setups, stops, etc.
7) I know that 100% success rate with a 50% profit on every trade is unreasonable, but I'd like to develop a strategy or strategies that have a reasonable chance of doing better that I would do if I put that money into IVV and left it there.

I've done some study on indicators, basics of support and resistance, trend lines, etc., but have never put it together into a strategy. If anyone could share some resources that you found helpful in developing your trading style, I'd certainly appreciate it. And of course, any other stories, suggestions, or hints would also be accepted gratefully! :)

Thanks so much!


PS, because I"m new here, am I allowed to post charts and discussions of paper trades/trades that I'm doing to get my reasoning out there for feedback?


PS, because I"m new here, am I allowed to post charts and discussions of paper trades/trades that I'm doing to get my reasoning out there for feedback?

Welcome Tom! As far as posting charts and discussion of trades, go for it - that's what we're here for!

You mentioned you've done a bit of reading, can you list out the books you've read so far?


Junior member
Hello, Sharky,

Mostly longer term investing stuff. Random Walk Down Wall Street, and have read quite a bit on the Bogleheads forums. The 3% Signal by Jason Kelly (learned the concept of value averaging from that book, actually found it quite interesting). Beating the Market, 3 Months at a Time by Gerald Appel (I'm actually implementing his strategy in one of my accounts, an IRA). That book recommends a momentum based strategy. Trend Trading by Guppy, which was an interesting read, and I've done some paper trading using his "Guppy Bands." I like the concept, but he seems to be soft on the mechanics of entries, exit points, stops, etc. A couple of books about Dividend Growth Stock Investing (Get Rich with Dividends by Lichtenfeld comes to mind), and was actually investing in Dividend Growth Stocks, and doing pretty well, when I decided to simplify, and go to a lazier ETF approach.

I also looked into FOREX for a short time, and did the course on BABYPIPS. Before putting any money into it, I decided that at this time I don't want to trade forex, as I can't monitor it all day. I feel more comfortable being able to analyze charts when the market is closed, and set up my trades (if any for the next day). That is why I'm looking at longer term, perhaps Swing (which may be a bit short-term for me), medium-term momentum, and trend strategies.

Hope that makes sense.

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