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Trading The ETF Horizon S&P TSX 60

11/23/10 08:31:05 AM
by Koos van der Merwe

Horizon BetaPro S&P/TSX 60 Bull ETF offers a daily investment equal to 200% the daily performance of the S&P/TSX60 Index before fees and expenses. Good deal?


Security:   HXU-T
Position:   Buy

The HBP 60 Bull takes positions in financial instruments and/or equity securities to seek daily investment results, before fees and expenses, that correspond to twice the daily performance or inverse daily of the S&P/TSX 60 Index. They are rebalanced daily, so their risk is limited to the initial invested capital. As a result, 200% benchmark tracking over a longer period is dependent upon the extent of compounding and the underlying benchmark volatility.

FIGURE 1: HORIZON BULL S&P/TSX 60, DAILY
Graphic provided by: OmniTrader.
 
Figure 1 is an OmniTrader chart with the red green strategy I prefer to use to trade stocks. I use a trailing-stop signal to take me out of the trading position. Note how often the strategy gives a buy signal and how often it is stopped out by the trailing-stop signal.

The basic red green strategy gives a buy signal when the close price of a share is greater than the high price of 10 days ago, and a sell price when the close price is less than the low of six days ago.

However, for trading the Horizon Beta Pro exchange traded funds (ETFs), I have changed the strategy so that a buy signal is given when the close price is greater than the low of six days ago. The two indicators shown on the chart, the relative strength index (RSI) volume histogram and the stochastic RSI cycle indicator are confirmation indicators.


Finally, do note that this strategy is a short-term trading strategy only, not a long-term investing strategy.



Koos van der Merwe

Has been a technical analyst since 1969, and has worked as a futures and options trader with First Financial Futures in Johannesburg, South Africa.

Address: 3256 West 24th Ave
Vancouver, BC
Phone # for sales: 6042634214
E-mail address: petroosp@gmail.com

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Date: 12/01/10Rank: 5Comment: Good call. Dick Slayton
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