How to Buy Shares - QQQ Power Shares Trading Tips

Exchange Traded Fund

QQQ is an exchange traded fund (ETF) in the fund family of PowerShares QQQ Trust. The fund was incepted on March 10th 1999 and has net assets of $18.7 billion in the large growth category. Some investors appear to believe that the liquidity of an ETF is dependent on the fund's average trading volume, or the number of shares traded per day. However, this is not the case. Rather, a better measure of ETF liquidity is the liquidity of the underlying stocks in the index.

QQQ is As Good As a Stock

QQQ is 1/40th of the 100 stocks that makes the Nasdaq-100 index. Nasdaq-100 index consists of the largest 100 non-financial securities listed on the Nasdaq Stock Market. The QQQ fund is a unit investment trust designed to correspond generally to the performance, before fees and expenses, of the Nasdaq-100 index. QQQ is therefore as good as a stock; it pays dividends and has options. Rather than having a portfolio of the 100 stocks that comprises the Nasdaq-100 index, you can instead have QQQ and benefit from low fees, instant pricing and tax advantages among other attractions.

Spread Risks Across Other Stocks

You should prefer trading QQQ Exchange Traded Fund because QQQ will spread risks across the other 100 stocks, QQQ pay dividends, QQQ is less noisy, QQQ is not very prone to rumors and or manipulations, QQQ Options are spread at workable intervals for spread strategies, QQQ options have very high volumes and above all, QQQ trades are easily predictable by using the broad market indices of Nasdaq, SP500, Dow, Russell 3000 and NYSE.

QQQ Stock Following and Trading Tips

Ten Top Holding Stocks

The ten top holding stocks of QQQ fund include Apple (AAPL, 13.17%), Microsoft (MSFT, 5.64%), Qualcomm (QCOM, 5.54%), Google (GOOG, 4.89%), Research in Motion (RIMM, 4.22%), Cisco Sys (CSCO, 3.14%), Gilead Sciences (GILD, 3.08%), Oracle (ORCL, 2.88%), Intel (INTC, 2.76%), and Teva Pharm (TEVA, 1.85%).

Sector Weightings

Sector weightings for QQQ is Software - 16.97%, Industrial Materials - 2.52%, Hardware - 38.51%, Media - 6.09%, Telecommunication - 1.66%, Healthcare - 14.51%, Consumer Services - 9.74%, Business Services - 9.83%, and Consumer Goods - 0.17%.

Why You Should Prefer Trading QQQ

You should prefer trading QQQ Exchange Traded Fund because QQQ will spread risks across the other 100 stocks, QQQ pay dividends, QQQ is less noisy, QQQ is not very prone to rumors and or manipulations, QQQ Options are spread at workable intervals for spread strategies, QQQ options have very high volumes and above all, QQQ trades are easily predictable by using the broad market indices of Nasdaq, SP500, Dow, Russell 3000 and NYSE.

Following QQQ Power Shares' Trading Directions with Precision

By intermarrying several facts and in consideration of only proven mathematical logics, the table below will provide you with logical trading tips and conditions that will beat everyone else's trades hands down. The table shows trades on QQQ as a stock from April 05, 2007 to the current date.

If you look at the net profit realized from QQQ trades in the table shown (click on the table to view larger size of the table in a new window), to many people, these gains are small percentages perhaps not worth the effort. Then why should you risk trading these QQQ trades? The real gains are in between the tops of crests and bottoms of troughs. All you need to know is to be able to identify where the tops of crests and bottoms of troughs are. A 5% gain in QQQ stock may translate to 100% gain in its options. The opposite is also true. You may look at trading these small gains to generate better gains from options.

Refer to the page QQQ Power Shares' Tradable Crests and Troughs as a reference to understanding these trades.

Power Shares Exchange-Traded Fund Trust, QQQ (From April 05, 2007 to the Current Date) - Updated July 27th, 2009

Power Shares Exchange-Traded Fund Trust, QQQ (From April 05, 2007 to the Current Date) - Updated July 27th, 2009.
Power Shares Exchange-Traded Fund Trust, QQQ (From April 05, 2007 to the Current Date) - Updated July 27th, 2009.

(Click On the Table Above to View Larger Size of the Table in a New Window)

Understanding the Table - Market Currently in a Downtrend

1. Look at the current trade entry which is a Short on QQQ which was initiated on June 11, 2008 at a price of $47.37. You will notice that the only driving forces are QQQ price and price of Nasdaq Composite index.

2. Looking further you will notice that what triggered that short trade was the conditions that (a) If QQQ less than $47.82 AND (b) If $COMQ less than $2430.36, sell to open (short) QQQ stock. You are able to achieve that by using an automatic multiple conditional order that you set and resides in your broker's trading system.

3. Immediately that trade was initiated, a automatic conditional stop loss order was set to prevent you from losing substantial amount of money had the QQQ gone to the upside. In this case the automatic stop was buy to close (long) QQQ stock on conditions (a) If QQQ is greater than $50.61 AND (b) If $COMQ is greater than $2549.94. Luckily in this case the choice of the QQQ trading direction was correct and QQQ sunk far deep.

4. What do you do next? You try to lock your gains by adjusting your automatic stop loss order with your broker. As you can see that automatic stop loss order has been adjusted until it is currently standing at (a) If QQQ is greater than $36.15 AND (b) If $COMQ is greater than $1896.95, buy to close (long) QQQ stock.

5. With time and if QQQ sunk far deep, that automatic stop loss order will be adjusted downward accordingly (watch this page for updates).

6. Between June 11, 2008 and now there have been tops of crests and bottoms of troughs which have been very profitable when traded to the downside because the market has been in a downtrend. All you needed was only to be able to identify where the tops of crests and bottoms of troughs were.

7. December 8th 2008: The stop loss order has been penetrated. The market is now uptrend.

8. January 16th 2009: The stop loss order has been penetrated. The market is now downtrend.

9. April 02, 2009: The stop loss order has been penetrated. The market is now uptrend.

Automatic Stop Loss Order

As QQQ stock currently stand, it will remains in an uptrend (a) If QQQ is greater than $34.30 AND (b) If $COMQ is greater than $1727.05. With time and as QQQ stock moves, that automatic stop loss order will be adjusted accordingly (watch this page for updates) to protects your profits or losses.

It is important to note that the price of QQQ is getting closer to stop loss price of $34.30 which means the trend can change any time but until then remain uptrend.

Contents for Entertainment Purposes

And because losing a trade can be painful to some people, the contents of this hub are meant for entertainment purposes only.

But you can try this Free stocks trading. It will not cost you any cent. Use the stop loss I use here and update the stop loss accordingly. With time you will be an expert in trading the stock market. All that will be free.

The stock market is an industry plagued with skepticism.

QQQ Stop Loss Orders

(click column header to sort results)
Date   
Stop Loss   
Trade This Direction   
November 2, 2009 
$2113.99 to the Downside 
Upside 
October 12, 2009 
$2040.73 to the Dowside 
Upside 
September 14, 2009 
$1958.04 to the Dowside 
Upside 
August 31, 2009
$1929.64 to the Dowside
Upside
July 20, 2009
$1727.05 to the Dowside
Upside
The Nasdaq Index is the determining factor, trade QQQ Power Shares in the Direction of Nasdaq Index

The Author’s page is designed to help beginners and average readers make some money as an extra income to supplement what they may be earning elsewhere - details of which you can find in My Page, if you will.

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Comments 21 comments

MysteryLeo 7 years ago

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Ally 6 years ago

Very Informative, thanks for the post!

----

Ally

www.trading-strategy.com


Andy 6 years ago

I enjoyed reading your hub. It took me a long time to finally realize I didn't really have to pick which way the market would go to earn consistent profits.


Andy 6 years ago

Thanks for creating this hub as I'm sure it has helped some traders looking at the QQQQ.


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