Trading ETFs: Gaining an Edge with Technical Analysis

Whether you′re interested in dealing exclusively with ETFs or would like to use them to supplement your portfolio, the Second Edition of Trading ETFs contains the in–depth insights and practical advice you need to achieve these goals.

Written by experienced ETF trader Deron Wagner, this reliable resource outlines the author′s proven approach to successfully trading ETFs by using technical analysis and "trading what you see, not what you think."

Engaging and informative, the Second Edition of Trading ETFs opens with a brief history of ETFs and introduces you to the numerous fund families from which you can choose ETF products. From here, Wagner walks you through the essential aspects of his "top–down" trading strategy by showing you specifically how technical analysis is used to trade ETFs. After learning how to select the best ETFs for trading and investing, you′ll discover through actual trades Wagner has executed how to determine the proper timing for entering and exiting your positions.

Chances are you′re already familiar with ETFs and perhaps already invest in them. Whatever your case may be, Trading ETFs , Second Edition can help improve your understanding of this popular financial product and put you in a better position to profit from it.

Foreword ix

Acknowledgments xi

PART I: ETF OVERVIEW AND SELECTION

CHAPTER 1 Why Use Technical Analysis with ETFs? 3

CHAPTER 2 Major Types and Families of ETFs 11

PART II: ETF SELECTION THROUGH TECHNICAL ANALYSIS

CHAPTER 3 The Top–Down Strategy 31

CHAPTER 4 Finding Indexes with the Most Relative Strength 39

CHAPTER 5 Selecting the Best ETFs 55

CHAPTER 6 Supplementing the Basics 69

PART III: TIMING YOUR ENTRIES AND EXITS

CHAPTER 7 Strategies for Entry 87

CHAPTER 8 Strategies for Exit 99

CHAPTER 9 Ten ETFs Bought Long 113

CHAPTER 10 Ten ETFs Sold Short 139

PART IV: FINE–TUNING YOUR STRATEGY

CHAPTER 11 Tailoring Your Approach 165

CHAPTER 12 Additional Pointers 177

Afterword 191

Suggested Reading 193

About the Author 195

Index 197

DERON WAGNER is the founder and head portfolio manager of Morpheus Capital LP, a long/short equity hedge fund, as well as Morpheus Trading Group, a trader education firm specializing in exchange–traded funds and stocks. Recently, Wagner launched his Hong Kong based company, DragonCharts, which helps foster the development of traders through education with live online stock analysis webinars, and includes a proprietary stock scanning platform. Wagner is the author of the first edition of this book and coauthor of The Long–Term Day Trader and The After–Hours Trader. He also appears in the popular DVD Sector Trading Strategies and is a frequent guest speaker at various financial seminars around the world. He has appeared on CNBC and ABC. Wagner teaches his ETF investment and trading methodology through his Wagner Daily and Wagner Weekly newsletters.