ETF Trading Strategies

ETF CFD trading is a niche financial market that is rapidly growing in popularity. Most online forex brokers now offer ETFs (exchange-traded funds) to clients. There are superb opportunities to earn high commissions when promoting ETF CFD trading as a broker affiliate partner!

2021 was a record year for ETFs with a massive $1.22 trillion in net inflows. This was up an astonishing 71% on 2020 figures. High inflation is now a major public concern, and top financial analysts like Gargi Chaudhuri of BlackRock Inc are recommending hedging with ETFs containing inflation-linked bonds and other solid assets.

Most affiliates and traders lack a clear understanding of ETFs and how they function as CFDs (contracts for difference). Read on for clear explanations of CFD vs. ETF, the best broker to promote, and how to make high profits from ETFs as an affiliate.

What is an ETF in Trading?

An exchange-traded fund is a basket of assets that trades on an exchange in much the same way as an individual stock. If you already understand stock trading basics, it’s a quick and logical jump to ETF trading strategies.

Potential traders who are interested in the stock market will respond positively to ETFs. The key to converting quality traffic is to provide good content with clear explanations of ETFs and CFDs and current market news and analysis.

What is an ETF in Trading: Key Data?

An ETF is an investment fund that tracks underlying assets. The constituent assets can be drawn from a single market or industry, e.g., Energies or Agriculture, or could be diverse assets that include stocks, indices, bonds, commodities, etc.
ETFs change in value throughout market hours. Different ETFs have different risk levels and volatility. One reason ETFs are popular is that their value isn’t dependent on the performance of a single asset. If a constituent plunges in value, the financial loss may be balanced by a positive performance by other assets.
ETFs are similar in some respects to Index Funds and Mutual Funds. The key difference for affiliates is that ETFs perform like shares and are readily accessible to individual traders as CFDs. Well-known ETFs include the Dow-Jones US Real Estate Index Fund and the Energy Select Sector SPDR.

Understanding ETF CFD Difference

There’s a lot of unnecessary confusion about the ETF CFD difference. You can easily create high-converting marketing materials if you get the CFD vs. ETF issue clear from day one. When creating primary site content, landing pages, and social media creatives, always present simple explanations.

As well as defining the main ETF CFD difference, it pays to list the potential benefits of CFDs and ETFs. You can go into greater detail about differences between ETF and CFDs with second-tier content like eBooks and trading guides.

ETF CFD Trading made Easy

As we already explained, an Exchange Traded Fund (ETF) is a financial instrument that can be traded much like a corporate stock or share, e.g., Google, Amazon, or Disney.

A Contract for Difference (CFD) is a financial mechanism that allows an online trader to open a position on an ETF in real-time and at real market prices. A CFD position allows the trader to try and profit from any change in the ETF’s value without buying the ETF itself.

Traders can use a CFD to open either a Long or Short position (buy or sell) on an ETF. If they correctly predict its market performance, the difference between each trade’s opening and closing price will represent a profit. A trader can potentially profit from an ETF that loses value and from one that rises in value.

5 Potential Advantages of ETF CFD Trading

CFD trading can deliver high profits* in a short time.
CFD trading is fast, convenient, and transparent.
AvaTrade offers up to 5:1 leverage on some of the world’s top ETFs.
ETFs can be a useful hedging tool as part of a broader risk management strategy.
ETFs can be a useful hedging tool as part of a broader risk management strategy.

*Your partner CFD affiliate program will give you precise instructions about promoting CFD profitability and the risk factors associated with ETF CFD trading.

ETF Trading Strategies

High-value traders (the kind of traffic that earns profitable long-term RevShare commissions) will usually expect more than a simple explanation of what an ETF is in trading. Your goal should be to provide high converting digital incentives based on ETF trading strategies. These can include eBooks, video tutorials, and personal training.

When considering which strategies to promote, it’s worth considering ETFs vs. CFDs. Not every trading strategy applies to CFD trading.

Swing Trading
Swing traders look for clear trends or market events that produce sizable swings in the value of an ETF. If you have specialist knowledge of a niche market, you can find a fund that will reflect broad trends in that market. Generalists and beginners often swing trade on commodity-based ETFs.
Sector Rotation
Sector rotation is an ETF trading strategy that requires a higher level of financial background knowledge. Traders who practice sector rotation attempt to benefit from existing economic cycles by moving funds between different sectors as opportunities occur.
Hedging
Hedging can be a useful strategy for traders with wide market exposure across different asset classes. Broad market ETFs based on the S&P 500 or DJIA can potentially offset sudden drops in value in niche assets. ETFs are a popular hedging asset for beginners due to their relative simplicity.
Seasonal Trends
Critical commodities like Gold, and assets like US equities, have historically displayed seasonal price movements. Many commodity traders are considering the possibility that Gold will rise in September 2022 due to increased seasonal demand in India. Gold-based ETFs usually reflect any gain in value.

Online ETF CFD trading is a lucrative market niche that is set to grow again in 2022. You can earn high affiliate profits by referring ETF traders to AvaPartner. The advantage of promoting ETFs is that they are comparable to stocks. Many ETFs also feature well-known assets like Gold or Oil and names like the S&P, Dow, MSCI, and SPDR.

FAQ

Does ETF CFD Trading Pay High Affiliate Commissions?

Yes! If you sign up with AvaPartner, you can earn highly high affiliate commissions. ETF CFD trading is expected to be a growth market in 2022. You can easily negotiate a profitable commission plan that will suit your affiliate business. It’s worth remembering that ETF traders will usually also trade stocks and bonds. Many will quickly branch out into forex, cryptos, and other assets. If you convert high-quality traffic, you will earn high affiliate commissions – it is that simple. Even if the core of your affiliate business is built around promoting forex and crypto trading, it’s worth testing ETFs campaigns and creatives.

Is AvaTrade the Best ETF CFD Broker to Promote?

AvaTrade and AvaPartner have won the loyalty of some of the world’s highest-earning affiliates. AvaTrade is an easy brokerage to promote. Traders react positively to the brand love the choice of trading platforms (including MT4, MT5, Web Trading, Mac Trading, and other high-tech tools). AvaTrade was one of the first brokers to add ETF CFDs to its asset index and offers 5:1 leverage on ETF CFDs. Broker affiliate partners benefit from AvaTrade’s regulatory status, global presence, established reputation, and high liquidity. Every affiliate has its criteria, but AvaTrade is arguably the best ETF CFD broker to promote in 2022.

Is CFD vs. ETF Easy to Explain to Traders?

Successful affiliate partners invest a lot of time and resources explaining what CFDs are and why CFDs can be so profitable. They also explain the additional benefits of trading CFDs (speed, simplicity, transparency, and convenience). If you’re aiming for high commissions as an affiliate – and you understand your traffic – you will find an effective way to explain ETF CFD differences. Fortunately, it’s all pretty basic. An ETF is an asset; a CFD is a type of trade that you can open on an asset. Most traders understand the concepts very quickly. The main issue is that ETFs aren’t particularly well-known compared to forex, crypto, and stocks. You have an excellent opportunity to raise trader awareness and cash in on a rapidly growing market.