How to trade iShares etf

How can a trader use iShares ETF effectively for ETF trading strategies? There are several options that can be used for different kinds of stock market strategies.

Short term day traders could use some iShares exchange traded funds for intra-day stock trading. Swing traders and position traders could develop a very good short-term stock market strategy for these exchange traded funds.

Index etf shares for daytrading

A daytrader can use most liquid iShares funds to daytrade these stocks. His selection should probably include only main index ETF shares.The list of ETFs for daytrading will include most liquid exchange traded funds. My personal selection would be:

IWM … Russell 2000 Index Fund
IVV … S&P 500 Index Fund

Both these iShares funds have enough liquidity for effective daytrading and also offer nice intraday moves which can be used for daytrading strategies. Here is an intraday chart of IWM iShares ETF

shares ETF daytrading IWM

Ishares funds selection for swing and position trading

I prefer to be a swing trader and position trader. My core strategy is based on using technical analysis of stock charts. To utilize trading strategies for iShares funds I need to select and categorize funds.

I created several categories in my list of ETF shares.

Technology related ETF funds

Technology related ETF funds should represent sectors of NASDAQ stock market. I like to compare shares in this list with a broad NASDAQ composite index to identify which sector has the most relative strength or relative weakness.

A list of ETF funds will be based on these tickers:

IYW … Dow Jones U.S. Technology Sector Index Fund
SOXX .. PHLX SOX Semiconductor Sector Index Fund
IGN … S&P North American Technology-Multimedia Networking Index Fund
IGV .. S&P North American Technology-Software Index Fund
IBB … Nasdaq Biotechnology Index Fund

Non-technology sector ETF funds

These shares represent more broad based sectors. These sectors should be compared with the S&P500 stock market index.

IYK … iShares Dow Jones U.S. Consumer Goods Sector Index Fund
IYC … iShares Dow Jones U.S. Consumer Services Sector Index Fund
IYE … iShares Dow Jones U.S. Energy Sector Index Fund
IYF … iShares Dow Jones U.S. Financial Sector Index Fund
IYH … iShares Dow Jones U.S. Healthcare Sector Index Fund
IYT … iShares Dow Jones Transportation Average Index Fund
IYJ … iShares Dow Jones U.S. Industrial Sector Index Fund
IYM … iShares Dow Jones U.S. Basic Materials Sector Index
IYZ … iShares Dow Jones U.S. Telecommunications Sector Index Fund
IDU … iShares Dow Jones U.S. Utilities Sector Index Fund
IYR … iShares Dow Jones U.S. Real Estate Index Fund

How to picks best ETF funds for trade

I prepare picks for bearish and bullish watch lists using relative strength analysis.

Here is one example of such sector based analysis. When I went through the list of iShares funds I have noticed clear relative strength in the utilities sector. You can see it on the charts below. I placed IDU into my bull ish ETF watchlist and I am looking for a possible trading setup.

ishares ETF relative strength analysis 01ishares ETF relative strength analysis 02