TradingMarkets has launched Leveraged ETF PowerRatings, a system that rates leveraged exchange-traded funds on the likelihood of their value making a short term price advancement or retreat.
“The only thing that has been in greater demand than leveraged ETFs themselves is a quantified professional way to trade them successfully,” says David Penn, editor in chief at TradingMarkets.com.
A colour-coded one to ten scale is used to give traders a quick and accurate assessment of their selected leveraged ETFs’ trading viability. Behind the rating lies an algorithm based on backtested data of leveraged ETFs from their inception date through 2009. This data spans over 17,000 trades.
“The design, though simple, is consistent with the statistical validation that underlies our leveraged ETF PowerRatings system and all members of our PowerRatings family of products,” says Tom Hughes, president and chief operating officer of The Connors Group.
A PowerRating of nine or ten informs a trader that the ETF is in a position to make positive headway within the next swing trade cycle. Conversely a PowerRating of one or two is an indicator of likely downward price action, suggesting that ETF be avoided or shorted.
Nearly 80 per cent of leveraged ETFs with a PowerRating of ten increased in price over the next few trading days when tested from inception through 2009.
TradingMarkets.com is a stock and ETF fund trading site for independent investors.
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