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Trading ETFs: Gaining an Edge with Technical Analysis

Deron Wagner, Marvin Appel (Foreword by)
ISBN: 978-0-470-88530-7
256 pages
June 2010
Trading ETFs: Gaining an Edge with Technical Analysis (0470885300) cover image


An exchange-traded fund (ETF) is a basket of stocks that trades on an exchange with the same simplicity and liquidity of an individual stock. By the end of 2007, 546 ETFs were trading on U.S. exchanges and some 450 were in registration. The total asset growth of ETFs has been equally impressive, doubling every year since 1994 and reaching $5.8 billion in 2007.

In Trading ETFs: Gaining an Edge with Technical Analysis money manager Deron Wagner introduces the major types and families of ETFs and then provides step-by-step guidance to picking and trading funds.

Benefits of ETFs include:

  • Exposure to equities at a lower level of risk than trading individual stocks
  • Lower fees
  • Access to markets that were previously difficult and expensive to participate in, including: Government Treasury bonds, international markets, commodities and even currencies.

Unlike other books on ETFs, Wagner's strategies are based on technical analysis, a method of timing the market that greatly improves an investor's chances of predicting short and intermediate term ETF trends.

Benefits of Wagner's approach include:

  • A 'top down' trading strategy that increases an investor's odds of success
  • A method for identifying the strongest sector indexes
  • A method for identifying the ETF families with the greatest relative strength

ETFs are as easy to invest in as mutual funds and they will soon be as popular. Wagner's comprehensive catalog of the ETFs now available, his insights into successful trading techniques, and his solid research and informative examples, will be an invaluable resource for everyone trying to come up to speed on this new investment opportunity.

Gold Medal Winner (tie), Investing Category, Axiom Business Book Awards (2009)

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Table of Contents



Part One: ETF Overview and Selection.

1 Why Use Technical Analysis with ETFs?

2 Major Types and Families of ETFs.

Part Two: ETF Selection Through Technical Analysis.

3 The Top-Down Strategy.

4 Finding Indexes with the Most Relative Strength.

5 Selecting the Best ETFs.

6 Supplementing the Basics.

Part Three: Timing Your Entries and Exits.

7 Strategies for Entry.

8 Strategies for Exit.

9 Ten ETFs Bought Long.

10 Ten ETFs Sold Short.

Part Four: Fine-Tuning Your Strategy.

11 Tailoring Your Approach.

12 Additional Pointers.


Suggested Reading.


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Author Information

Deron Wagner is the founder and head portfolio manager of Morpheus Capital LP, a U.S. hedge fund, and Morpheus Trading Group, a trader education firm that provides daily technical analysis of leading ETFs and stocks. Wagner is coauthor of The Long-Term Day Trader (Career Press, 2000) and The After-Hours Trader (McGraw-Hill, 2000), and he also appears in his popular DVD, Sector Trading Strategies. He teaches his trading methodology to nearly 3,000 Internet subscribers of his free weekly newsletter, The Wagner Weekly, and has a subscription newsletter, The Wagner Daily.  He is a frequent guest speaker at various financial seminars around the world and has appeared on CNBC and ABC.
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"Valuable not only for a comprehensive cataloguing of the vast array of exchange-traded funds that are now available but also for the insights into successful trading techniques, Deron Wagner's Trading ETFs should become the definitive guide to this increasingly vital part of the capital markets. The book includes numerous examples of the kinds of techniques that Wagner uses in his selection of the most timely ETFs to trade and underscores one of the core insights of his trading discipline, which is to ‘trade what you see, not what you think.’ This book is recommended both to professionals who are using—or should be using—ETFs as an asset class within their portfolios, as well as for the individual investor who wants exposure to wider sectors and geographical regions than those available, with comparable cost-effectiveness,elsewhere."
Clive Corcoran, Publisher and editor, TradeWithForm.com
Author, Long/Short Market Dynamics
Pension fund manager and commentator on CNBC's European Closing Bell

"Deron Wagner has written an excellent book, backed up by solid research and informative examples. This is one of the most illuminating works on exchange-traded funds written in recent years. His incisive commentary on position sizing alone is worth the cost of the book."
Alan Farley, Publisher and editor, HardRightEdge.com
Author, The Master Swing Trader

"Deron Wagner has written a terrific book on ETFs based on his extensive experience as a trader. He provides numerous insights and examples of his successful trading style. This is truly a must-read book for anyone who trades or is thinking of trading this fascinating investment product."
Michael Sincere, Author, Understanding Options and Understanding Stocks

"Having traded the ETF markets since their infancy, Deron Wagner offers the reader a voice of true experience. In this book, he describes an analysis structure that has withstood the test of time. Investors looking for an edge in the ETF marketplace need look no further!"
Bo Yoder, Trader and risk management consultant
Founder, BoYoder.com

"With ETFs now available for the broadest market indexes to the most focused of sectors, Deron’s new book on ETFs is a must-read for investors and traders wanting to simplify the choice of which ETFs to trade and how to trade them."
Greg Capra, President and CEO, Pristine.com

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