The ever changing trend in the price range for the different commodities in the market can make the traders do a profitable business only on one condition if they follow the right trend. In order to earn maximum profits, the investors get into the practice of moving out in the market exploring what is new and the venture they aren’t successful in, removing it from the catering list. In order to retain the profit going and lessening any kind of loss it is essential to go with the groove, unlike in 2008 when several investors lost 50% of their account value. What could have helped at that time was a simple 10-month moving average strategy.
On account of using the MA trading strategy, traders acquire when the cost closes beyond the MA and vend when the value depreciates below the MA. On SPDR S&P 500 ETF Trust(NYSEARCA:SPY), this policy liberates a selling indicator less than 8% way back in 2007. The success has been drafted clearly in the Mebane Faber’s “the Ivy portfolio.” While gazing at the conclusion for periods of more than 30 years, inclination following indicators would roughly be lucrative.
All the late entries would remain at the bottom can happen due to the ever changing trends, the scheme or approach can underperform as far as the purchase and the hold funds over a period of year. Therefore, the excellent performance and underperformance could exchange their places over time frames. Throughout the time span between 2000 and 2012, the traders who would be making use of the 10 month MA would have a chance of doubling their money straightaway whereas the buy and hold investors shall be able to experience growth by mainly 51%. One of the largest benefits of the 10 month MA shall be the reduction of any kind of risk that was prevailing. Like in 2000, the buy and hold investors were set to lose 51% of their balance. Similar kind of results was experienced while tests were performed on PowerShares QQQ Trust, Series 1 (ETF)(NASDAQ:QQQ). The traders had a chance of gaining 45% and a loss of not more than 26%. While by the end of 2012, reports came in that the traders could eventually lower down the price list of PowerShares QQQ Trust, Series 1 (ETF)(NASDAQ:QQQ).
One of the brightest spots in the market is iShares Russell 2000 Index (ETF)(NYSEARCA:IWM) that is leading in the market due to New Year being around. The 10 Month MA is concluded to be an indicator for describing any upcoming trend in the market. While the other ETF’s are still in the uptrend and gaining momentum eventually.
The shares of the following:
The shares of SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is down by 0.29% to close at $145.73
The shares of PowerShares QQQ Trust, Series 1 (ETF)(NASDAQ:QQQ) is down by 0.52% to close at $66.85
The shares of iShares Russell 2000 Index (ETF) (NYSEARCA:IWM) were down by 0.30% to close at $86.65.