My tips for ETF trading


When it comes to ETF trading, most beginners encounter the same problems over and over again. As an experienced trader, I will give you my 2 most important tips. With them you can increase your profits!

1. be sure to choose a cheap and reputable broker:

Due to electronic exchange trading, you need an online broker to invest in ETFs. There are many online brokers on the internet, which makes it all the more difficult to make the right choice, as there are serious differences.

I definitely recommend choosing a provider with good regulation and customer location, as you as a trader have a direct contact person. All brokers regulated in Europe are usually trustworthy.

In addition, you should compare the fees per trade. One of the recommended providers (XTB), for example, offers access to over 16 international stock exchanges worldwide.

Regardless of the broker, the following costs are incurred with an ETF:

  •     Index fees
  •     Management costs, if actively managed
  •     Order commission
  •     Transaction costs
  •     25 % taxation Soli deduction

My opinion on ETFs

Overall, I consider ETFs to be one of the lowest-risk investments worldwide. Through a high degree of diversification, the risk is transferred to many different assets.

forex trade

2. use leveraged ETFs for higher profit and loss

ETFs can also be traded on a short-term basis. This investment strategy in exness fx is referred to either as leveraged ETFS or ETFs as CFDs. Leveraged ETFs are so-called leveraged financial products. This means that you need less capital to make a large profit or loss. With a DAX ETF with a leverage of 1:2, the fund fluctuates twice as much as the Dax.

 The Dax makes a 2% profit and your leveraged ETF with a leverage of 1:2 makes a 4% profit, so to speak.

Another possibility is to trade an ETF via CFD with an even higher leverage. This involves investing directly in a CFD (contract for difference) that exactly replicates the exchange traded fund. The higher the leverage, the higher the risk and the possible profit. I have explained in detail how ETF trading with leverage works in a separate article.

My conclusion on exchange traded funds:

On this page you should have learned what an ETF is and what versions are available. I have given you a diverse insight for the investment possibilities.

Overall, I think ETFs are a good and lower-risk alternative to well-known investment methods. However, you should inform yourself sufficiently about the fund beforehand. You should be sure in which area you want to invest.

It is a new way to build a diversified portfolio. With the right investment, even the well-known stock indices can be outperformed.

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