High Probability ETF Trading: 7 Professional Strategies to Improve Your ETF Trading
***Rated one of the Top 10 Investing & Trading Books of 2009 by SFO Magazine***
See Larry Connors’ recent interview about ETFs in Investors Business Daily at ow.ly/38hUh
Are you worried about the risks associated with the stock market? Are you tired of seeing your returns diminish month after month, quarter after quarter?
Are you looking to potentially increase your trading profits AND reduce your risk level? How do you do this? With ETFs.
The First Qu
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Failure to honor guarantee is not a good sign,
Using short term RSI for temporary overbought/oversold in a market headed the other way is a notion that these authors have presented before. However, by torturing the poor old RSI, they have found an additional trick for the pony. They also tortured John Bollinger’s %b to produce pretty much the same signals found in the two RSI conditions.
A second approach, perhaps less familiar, is using highs/lows to create set-ups (highs/lows adverse to the market flow). Two variations on this, along with some scale down/up and scale in complete the eight entry strategems.
The authors have basically three varietals of exits. All are perfectly reasonable and appropriate to the work at hand. Two of these may be unfamiliar to many readers, thus making the book a worthwhile purchase without more.
I sound rather negative largely because those who have preceded me here are unjustifiably wildly optimistic. The book really covers very little ground, none of which is new.
At this update writing, I returned my book some three weeks ago. The company is claiming it didn’t arrive and is declining to honor their guarantee. I also should note that Dave’s wild enthusiasm may relate to his undisclosed business arrangements with the author/publisher of the book.
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|Dave S.,
Larry Connors and Cesar Alvarez’ new book, “High Probability ETF Trading,” can be considered a continuation of the research Connors published in his earlier books, most recently in “Short Term Trading Strategies That Work.” Written for short-term traders, the format is similar to his other books:
1. An introduction that lays out a trading philosophy;
2. General rules for setting up the trade, e.g., only take long trades when the S&P 500 Index is above its 200-day moving average;
3. Specific and simple entry and exit rules for a number of different trading systems;
4. Charts showing the entries and exits on various ETFs, with a step by step description of each part of the trade: setup, entry, and exit;
5. Trade results for these systems; and
6. Thoughts on scaling in and out of trades, as well as thoughts on money management.
Readers of “how-to” books generally worry about whether the published trades were “cherry-picked” to make the systems look better than they really are in practice. Connors and Alvarez point out the introduction to “High Probability ETF Trading” that the systems’ rules are robust, not curve-fitted, and backed by years of statistical test results.
I know from reading his earlier books that Connors seeks to develop strategies with a high probability of success. He and Alvarez hit the mark in this new book, which describes various strategies they developed and tested on various non-leveraged ETFs. Some of the strategies, like RSI 25, were developed years ago and described in Connors’ earlier books. Other strategies are brand new, like RSI 75 for shorting.
Unlike in Connors’ earlier books, this book discusses both standard and aggressive entries. “Aggressive” entries are second buys that are scaled in when the ETF becomes more oversold (for a long entry) or overbought (for a short entry). For example, buy the first unit when the 4-period RSI is below 25. Buy the second unit if the 4-period RSI is below 20.
As an investment advisor, I have neither the time nor the temperament to wade through books with chapter after chapter of musings, personal thoughts, and disjointed ideas. What I appreciate most about this book, as with Connors’ other books, is that the authors lay out their strategies in a no-nonsense, nuts-and-bolts fashion: “If this and this, then do that.”
I’ve traded Connors’ strategies for years and they work. No one trade will make you rich but the consistent small winners add up. I highly recommend reading “High Probability ETF Trading” if you are a short-term trader looking for strategies that will help you make money.
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|All trading books should be like this one,
After having traded stocks for over 10 years, I’ve recently begun trading ETFs more and more because I simply find them easier to trade, less risky and more flexible. In generally, I’ve done okay adapting my stock trading methods to ETFs trading. But I was disappointed at the lack of professional level education available that would enable me to improve my profitability. Then along came Larry Connors’ book, “High Probability ETF Trading.” It is a collection of eight well-thought out strategies that are laid out in a clear and concise manner. It is written in a way that all trading books should be written — you quickly read it and then apply it. There are indicators that these strategies employ are all readily available through standard chart packages. All the rules are black and white with no subjective judgment required. If you trade ETFs are planning to in the future, all I can say is that you must own this book.
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