Our Methodology

At PowerTradingETF we analyze several different timeframes when selecting our trading opportunities. Most of our trades are shorter term swing trades but we also offer some trades of longer duration. In the example that follows the stock market had just suffered a major decline and was trying to find a bottom.

The first timeframe we look at is the weekly chart to let us know what the longer term market trend is. As you can see from the chart below the larger trend is down. If we were taking a longer term trend trade we would want to align ourselves with the weekly chart. The Etf we are looking to trade is the (XLE), which is a basket of energy stocks.

The next chart we take a look at is the daily chart. While the weekly chart is showing a longer term downtrend, the daily chart is showing a near term upswing in the (XLE). As we said earlier the majority of our trades are shorter term swingtrades and will trigger off the daily of hourly charts. Price exploded out of a consolidation triangle and were pulling back. This area is circled in green. This is a great low risk trade entry, but we need to look at one more chart to time our entry.

The final chart we will study is the hourly or 60 minute chart. Each of these price bars equates to one hour of trading. We are looking for an area of support on the (XLE) that will provide a good low risk entry. A price gap formed in early May 09 that provided just that scenario. Shares of the (XLE) pulled back and tested that price gap in mid may and we purchased shares. We took our profits as shares rallied into an upside price gap that was formed on May 11th.

This is just one example of how we analyze an Etf chart to find our subscribers low risk, high probability trading setups. We hope you will try our completely risk free no credit card required trial and find out for yourself the many benefits of trading exchange traded funds.