How to Make Money With Trading Exchange Traded Funds

Exchange traded funds, or ETFs, are investment vehicles that trade during the day like stocks, but are a collection of investments like mutual funds. ETFs are popular trading tools, and many traders use them exclusively.

Instructions

1. Find an online stock broker (see Resources). Sign up for an account with one and fund the account with the cash you'll use for trading.

2. Research ETFs. All online brokers have research tools and articles from trading experts to get you started. Do some research and decide which ETFs you want to trade. Different ETFs track different investments. Some ETFs let you trade on U.S. stocks going up, others on U.S. stocks going down. There are even ETFs that are used to trade gold and silver. If you can pick a market to bet on, there is probably an ETF that can be used to trade that market

3. Research trading. Just as you researched the ETFs, use the tools that your broker offers to start researching some trading techniques as well as the extensive variety of terms with which you'll need to become familiar (for example, "retracement lines," "support lines," and "fibonacci bars").

4. Set your trading parameters. In the brokerage software, you will want to set the parameters for buying and selling the ETFs that you researched. You should always have a buy price and a sell price to make your trades efficient and profitable.

5. Keep learning and keep trading. It will take a good while to become proficient in the complexities of trading ETFs. Continue to research the market and to read about trading. The minute you stop learning, you'll stop making money.

Tips & Warnings

• Be sure to consider the costs and risks of each online broker, ETF and trade before you start.

References

• Yahoo! Finance on ETFs
• "ETF Strategies Revealed"
• ETF Forum

Resources

• Etrade
• Scottrade
• TD Ameritrade