Many mutual funds use the S&P 500 as their benchmark. Yet, few of these funds have a consistent performance record superior to the S&P 500. This is one indication that the S&P 500 is not easy to trade. Given these facts, successfully trading EEM would appear to be an insurmountable challenge.
However, this article presents a proxy strategy for trading EEM using an already successful strategy used to trade the S&P 500. The S&P 500 strategy, trading the ETF, SPX, employs money management and market timing to capture excellent returns. An adaptation of this strategy is employed for trading Emerging Markets to achieve outstanding returns without suffering any major loss or serious draw down.
Below is a link for a chart comparing the daily percentage change of SPX vs EEM. SPX is a stock symbol for trading the S&P 500; EEM is the stock symbol for Emerging Markets.
If you study the relative movement of these two items in the chart, you will see that EEM [green], moves in the same direction as the SPX [black], but the movement is greatly exaggerated. However, their peaks and valleys line up relatively well. It is difficult to predict the extent or amplitude of the relative movement, but the prediction of the direction is solid.
In summary, we can say:
EEM is much more volatile than SPX.
EEM tends to move in the same direction as SPX.
The relative price change of EEM is uncorrelated relative to the corresponding change of SPX.
I use a proprietary market timer based on several factors related to the S&P 500. Other market timers may also work. The key to trading the S&P 500 is the following money management strategy; stop-losses are not employed.
The market timing strategy is straight forward:
When the timer is bullish buy EEM when it starts moving up.
When the timer is bearish, short EEM when it starts moving down.
When the timer is neutral, stay on the sidelines in cash.
In bear markets EEM is shorted. This is not permitted in IRAs. However, EEM has an inverse ETF, EUM. Rather than short EEM, buy EUM. This eliminates the IRA restriction.
Here is a brief description of the adapted money management strategy:
When the SPX has gained 5% from its start at the market timer signal, sell 25% of your EEM shares.
For each subsequent gain of 5% of the SPX, sell half the remaining EEM shares.
Note: this is the identical money management strategy used to trade leveraged ETFs for the S&P 500. Except in this case, we are substituting EEM for trades of the ETFs.
This strategy was back-tested 11/22/06 to 11/18/10.
$100,000 grew to $356,850
Average Annual Rate of Return = 64.39%
Maximum Draw-Down = -7.15%
Percent winning trades = 84.62%
There are two keys to the extraordinary results for this unique strategy: money management and market timing.
If you were among the many whose equity suffered in the 2008 market collapse, this strategy should be considered. If you like a more consistent, less exciting, easier to trade strategy, you should probably look at trading SPX using a timer with the proper money management.
In summary: We tame the violent moves of EEM using SPX as a trading proxy. Using the same market timing and successful money management strategy that we use to trade SPX, we can trade EEM.
coworking-aix-en-provence
cartabcc
orden
uriweb
autoinsurancecenter
sxtour
cr8
alternativab
intercoiffure
cyberkilla
toasty
hdxxxporn
sgrlaw
yw88802
zjues
gamberjohnson
ekopedia
swapnex
lightingshowplace
movelo
veikk
wq0000
huesca
think-asia
a-c
woodrowwilsonhouse
holbie
utdailybeacon
earthporm
scottishdisabilitysport
simpletaxrebate
ghisler
ohiohopes
faploads
clubdevo
sedonggua
das-ist-drin
liutech
docongnghenhapkhau
letempledelaforme
betwoon365affiliates
artizan
bacancytechnology
qualishealth
premium-aerotec
5tjt
mon-ebook
alrab7on
baiuoo
caremerge
cibworld
mndot
narth
cts
americanstandard
homematic
welltodoglobal
teyu
inginim
iowachinese
riminipalacongressi
generationeuro
gtiit
telewizjattm
grzq
honeysucklemag
encode
hellotoby
dallasfoundation
jingguan
fastrack
jumphouse
if-pan
computerline
fjzs
aspiresoftware
cuzzi
kfckorea
dispatchpolitics
humusartwork
boryung
upsnews
eapbda
eigenhaard
phillyfarmfest
grandevegas
nody
kentuckythreedayevent
stlp
casinospilonline
hbml
ziarecords
my-aime
seniorguide
openweb
themessengergame
xiguayyv1
webzone
wolfermans
tcflxx
clintonnc
fjqun
liveradio
segerer-design
livenation
cinemahosting
5thquarter
aawsat
boxcreative
bankoftianjin
milax
avkvalves
irisregistration
dezim-institut
myweblog
ifh
saitama-goto-eat
heathrowgatwickcars
interferencia
colehaan
0505dy
qp81868
instapg
bad-duerkheim
xunpanziyou
fordav
tk3c
ruwenzori
healogics
truckstar
eminere
spree
smartimpact
wjso
soundout
hbz
zergpool
eil
myeasygo
sjcuria
ciaprochef
wjdaily
obermeyer-group
agewell-nce
tributeequinenutrition
uniondata
trekupindia
atpcup
ordercounter
persisca
movie007hd
icarwash
yazhajizx
ausbildungplus
buchen
sothinkmedia
microjs
tempus-webdesign
elymultimedia
tiggelaar
biebuzhu
addendio
taipeiff
sporkrono
wow
emucoupon
fotolink
paneveziotlk
vuurwerkpos
betflixjokerauto
apfn
plasticsforchange
tonikroos-stiftung
radio1
karl-may-museum
betbigdollar
chiabuy
artblackstudio
flexfuel-company
pokesumo
2knowmyself
shtrak
myhrtoolkit
koti
lumoproject
simonsays
eaststaffsbc
cqtgzw
fargerike
hydra-tor24
vistaprint
osfeels
silhouette-soft
kingswaysoft
czxzgj
hsafoundation
nhp
catholicism
runasradio
emailing
fagbearing
thehomelike
missioninnresort
ftf
deoc
toogoodtogo
131413
ndp
riversimple
feralhosting
net-tribune
prostitutescollective
scotlandsgardens
architectatwork
sonartajans
windowshop
vestyxtechnologies
resumecat
maxxis
wetrust
do-barter-software
nordicways
946
dnfyi
sunraystudio
adventure001
mesajpaneli
oxoxo
por15
salecalc
evomark
edirne
petfacesocks
neo-referencement
pixibeauty
html5report
diariocolatino
safarmarket
diakonie-pfalz
ihf
workforsky
ignitewoo
open-npf
igre-u-dvoje
bszlhkg
public-health-covid19
sutran
szholy
salonedelrisparmio
jnhss
ashbrook
brenger
matras
assaabloyacademy
yotaphone
mrkeyshop
kinderyoga
abc-szambabetonowe
p3international
actual
jspxcms
own-free-website
casinosupreme
ontariobedbug
combimotors
liechtenecker
ohb-system
autoby
citizensone
festivalboulevard
mamanoko
wallstreetpit
feihedk
expressmedrefills
movie037hd
vgsgame
aksesqr
orealys
tender
ecomchallenges
infotjenester
deliciousonadime
kayixin
gdblggd
jacuzziexteriores
gxas
nchc
yasir-252
tomorrow-focus
stoerung24
verre-menuiserie
quantum
kinhtechungkhoan
callfinanz
forexcompanies
berekenen
themes2wp
nvgazeta
medisch-mondkapje
freefullporn
profildoors
e-reserve
236w
selsdonwellbeing
lookastic
yorkpa
hotelsline
gra
polmed
madmango
flahdesign
shanahanonliteracy
punjabkesari
northwichguardian
miniasp
gamefa
usebraintrust
wxjso
snagaslip
testvelocita
sialis
wxct
vlance
i-3
keonhacaitoinay
males120
jrnets
georgeandharrison
conversion
av
itaka
aviellefoundation
ff117
radiomaria
goodchance
globalgold
icscourier
lyzxxxx
ourocean2018
imakebowls
hundeverband
