Hardcover: 203 pages
Publisher: Bloomberg Press; 2 edition
Released: January 2012
Back in the mid 90s, I remember talking with David Lerman, one of the best educators with the CME Group about these new products that were being issued. He told me that Exchange Traded Funds would change trading and be a huge deal. Now I tip my hat to him and his foresight to make that call.
There is no question that ETFs have revolutionized trading. Their impact has been, and will be, the equivalent to the creation of options and the birth of online trading. That is why I am always excited to see new information on how to trade ETFs. In his new edition of his book Trading ETFs, Deron Wagner uses his vast experience with technical analysis to help the reader gain new advantages trading these rapidly developing products.
While ETFs give the individual trader the opportunity to trade complete sectors, markets and indexes as easily as trading a single stock, their presence in the market has altered trading behavior and also some of the assumptions long held true by market technicians.
To help fully comprehend the nuance of these changes Wagner starts with the background history of ETFs as well as critical information regarding how these products are constructed. A great example is a section that outlines how leveraged ETFs are built. Like anything else that has what I like to call “high-horsepower” leveraged ETFs can be very difficult to predict without understanding how they work. The book also includes useful detail the various families of ETFs and the various underlying components they track.
Wagner covers a top-down strategy that is commonly used to identify the best potential ETFs and trades. Couple this road map to finding the trades with the next section on detailed entry and exit strategies unique to ETFs and the reader is provided with a full preparation to trade.
This new edition of Trading ETFs does a good job of providing the reader with the context of exchange traded funds as well as specific strategies that can be applied. I am always looking for what unique material is covered in a book and found the explanation of leveraged ETFS and daily resets to be very informative. Wagner’s additional pointers provided at the end of the book give him the opportunity to step back from the objective educator role and offer more of how he personally makes ETFs work in his portfolio and the exceptions to the rules traders need to be wary of.
VP, General Manager