Technical analysis books for beginners

[grah33]

anyone got some good books / online resource recommendations for the beginner wanting to master technical analsyes? in my opinion, a great resource has these qualities:
comprehensive - the main things we need to know all in one place.
this would include trend analyses, indicators, understanding volume and it's interaction with charts, patterns. don't care about the more advanced stuff
explains it well for the beginner
examples of how it's done



I've been going to lots of different places, but i think i would save more time if i just had one great resource to follow.

i found this website which i mention for other peoples benefit:



http://en.tradimo.com/learn/technical-analysis/ (on Tech Anal.)

probably the best one so far - even got qs and answers which forces you to really internalize what you learn and know how to use it on a practical level. after all, it's not until we do it that we have learned it. and explains things well enough

i've checked out investopeadia, asx site, incredible charts, random web pages, but i think a book covering all those things nicely all together is the way to go.

thanks.

 

[tech/a]

There are many aspects to T/A
I've spent 20 years on it!

In the end on my journey of condensation
I've settled on the simplest form.

So in answer I'll offer this.

If you want a long term method in T/A then you'll use very different techniques in T/A than you would
Use for shorter timeframes.

So investigate what you want to do with your analysis --- timeframe.
The time you have to train yourself.

But in the end you should investigate areas which most don't.
It's here you'll develop your edge.

Technical Analysis is a good start few know how to use it.

 

[grah33]

There are many aspects to T/A
I've spent 20 years on it!

In the end on my journey of condensation
I've settled on the simplest form.

So in answer I'll offer this.

If you want a long term method in T/A then you'll use very different techniques in T/A than you would
Use for shorter timeframes.

So investigate what you want to do with your analysis --- timeframe.
The time you have to train yourself.

But in the end you should investigate areas which most don't.
It's here you'll develop your edge.

Technical Analysis is a good start few know how to use it.

i have a lot of time to train myself - haven't been able to work much because of various difficulties. my plan is to learn the beginning TA stuff than from there to progress to learn day trading techniques. perhaps i could earn a little income on the side during the day alongside another casual evening job. i really need the money

 

[tech/a]

Let me re phrase.

Do you have $$ you want to invest and let churn
OR
Do you want to generate an amount over time with share trading
OR
Do you want to day trade.

There is so much out there----there is no point studying stuff that is
just fodder for the masses with very little PRACTICAL value.

That is you have to be able to use it.

Might as well become an expert in an area.

 

[Brildale]

I found the book "Come into my trading room" by Dr Alexander Elder to be quite good at introducing some technical analysis to a new trader. The book is very extensive and is designed for new traders coming into the market.

He goes over other things that are important as well like position sizing and risk.

It isn't the exhaustive reference you are probably looking for but I do think it is a good place to start if you are new to this kind of trading.

Good luck with your search. I will watch this thread closely to see how it ends up. I am also interested in T/A.

 

[grah33]

Let me re phrase.

Do you have $$ you want to invest and let churn
OR
Do you want to generate an amount over time with share trading
OR
Do you want to day trade.

There is so much out there----there is no point studying stuff that is
just fodder for the masses with very little PRACTICAL value.

That is you have to be able to use it.

Might as well become an expert in an area.

i guess i want to do swing trading. this is similar to what i was doing with the stock game, buying into several trades each week, some of them going up, others going down after a few days, then exiting with a profit or loss. i want to have the skills to make that work nicely , working at home.

i have about 20k to play with. my life savings, which is nothing compared to other people my age, who have their own house.

 

[tech/a]

Very seriously!!

If it is your life savings and you wish to short term swing trade from home
I presume to either supplement income or to generate a major income.
AND your at the stage of reading up on it---you will need many 1000s of hrs chart time.

Swing traders must be able to pick tops and bottoms within an area where enough can
be gleaned as a profit.

This can be dome but I only know of a few.
They are very successful but they have done the yards.

The question you need to be able to ask in many timeframes (Daily and Weekly) if stocks
is What is telling me this is about to turn.

The biggest hint I can give is support and Resistance and volume into a support and resistance area.
There is more but only time will help you see individual/cluster bar reversal patterns and continuation patterns.

Then you need to learn how your going to manage your trades.

You'll need good software and a good data feed.
All costly to you.

If you cant profit consistently on SIM you'll just chew up your Life savings!

 

[grah33]

Very seriously!!

If it is your life savings and you wish to short term swing trade from home
I presume to either supplement income or to generate a major income.
AND your at the stage of reading up on it---you will need many 1000s of hrs chart time.

Swing traders must be able to pick tops and bottoms within an area where enough can
be gleaned as a profit.

This can be dome but I only know of a few.
They are very successful but they have done the yards.

The question you need to be able to ask in many timeframes (Daily and Weekly) if stocks
is What is telling me this is about to turn.

The biggest hint I can give is support and Resistance and volume into a support and resistance area.
There is more but only time will help you see individual/cluster bar reversal patterns and continuation patterns.

Then you need to learn how your going to manage your trades.

You'll need good software and a good data feed.
All costly to you.

If you cant profit consistently on SIM you'll just chew up your Life savings!

thanks for the advice. there is a long way ahead of me, it seems. but hopefully i can still get some nice gains from time to time in the short term. i have the discipline and time to learn it all. i wonder what happens to such people (their annual wage). does it just keep getting bigger and bigger as u have more to play with. perhaps if i knew what i was doing, i could gradually increase the amount i put in until my wage becomes quite high, then keep that constant and store profits in bank. as time goes by the risk will get smaller and smaller (the trading money will become a small fraction of my savings). sounds good, but time will tell.

and there are many books in the local library including "charting made simple" which has been helpful so far.

 

[saroq]

I have no great sage advice for you Grasshopper I'll just answer your question.
Go to http://www.informedtrades.com/ and click on the "Free Trading Courses" 3rd title down is Technical Analysis. You'll also want to study Price Action and Candlesticks.

 

[grah33]

I have no great sage advice for you Grasshopper I'll just answer your question.
Go to http://www.informedtrades.com/ and click on the "Free Trading Courses" 3rd title down is Technical Analysis. You'll also want to study Price Action and Candlesticks.

thanks. i'm checking that out too. but i have to say - for future readers of this post - i think one excellent tip is to use the library and get many books. what's not covered in one book is in another book, and what you don't understand fully in one book is explained better in another book. and several of the popular (though not all) titles are found in the library in my area.

i'll try not to be too irritating

 

[CanOz]

thanks. i'm checking that out too. but i have to say - for future readers of this post - i think one excellent tip is to use the library and get many books. what's not covered in one book is in another book, and what you don't understand fully in one book is explained better in another book. and several of the popular (though not all) titles are found in the library in my area.

i'll try not to be too irritating

This is good advice about the library. Books are great to pass the time. You'll likely find a few points in each book that are the real meaningful morsels.

CanOz

 

[AverageJoe]

thanks for the advice. there is a long way ahead of me, it seems. but hopefully i can still get some nice gains from time to time in the short term. i have the discipline and time to learn it all. i wonder what happens to such people (their annual wage). does it just keep getting bigger and bigger as u have more to play with. perhaps if i knew what i was doing, i could gradually increase the amount i put in until my wage becomes quite high, then keep that constant and store profits in bank. as time goes by the risk will get smaller and smaller (the trading money will become a small fraction of my savings). sounds good, but time will tell.

and there are many books in the local library including "charting made simple" which has been helpful so far.

Discipline is how many aspiring trader/investor starts out without actually understanding what this profound word actually mean. I too started out in this cut throat game with such high esteem for discipline. Many books I have read with this generic theme about where you enter or exist plays a small part to the success of a strategy/system. It is what in between these points that matter. I never use to understand what it meant at all! What drives the market is fear and greed or fear of losing out (FOLO). Trading psychology is hardly been commented when you read any trading books and most spent the bulk of contents about the entry signal and then a few pages on exist. I never read many books talking about managing trades.

You mention swing trading which is the bulk of my trading strategy is but I also manage my own super fund but it is the boring trend trading less interference with market noises.

I started off trading life indulging in maths indicators and all the popular ones you hear and see the public use, I have been there. Over time I soon realise that these are another form of noises that can be confusing. Other may disagree and what works for them will work. My armoury is now naked chart with a support and a resistance line and that is it. No fancy moving average/fibs etc. And of course candle stick price action.

When starting off it can be confusing with so many boring to exotic strategies and systems, It is good to try and have an appreciation of each type of strategy and the objectives and pit falls each will posess. This is no easy task and reading books will has a steep learning curve in time. Videos help, there are a lot of free stuff over the web in youtube space but you need to know what is useful or marketing rubbish.

Here is a list of previous indicators and strategy I have briefly looked at;

MACD, RSI, Multi MA, Stochastic, directional DMI, Fibonnacci retracement/extensions, Harmonic patterns like butterfly, standard chart patterns ie triangles wedges flags etc, Elliot Wave (very briefly), multi candlestick patterns, support resistance, supply demand.

Trend trading, rotational trading, swing trading, mean revert trading, moving average crossover, breakout trading.

2% rule money management, equal split money management

Markets - asx top 300 stocks, speckies, Forex, Indices

Brokers - budget online, full service, OTC CFD, OTC Forex, commodities

Phew, don't know whether I recall any I missed! It took a long time to "know" what suits me in terms of markets, strategy, tools. You will realise that I have purposely left out trading psychology because it took a long time before realising that this is the most important aspect of trading. Hence you will hear that if some successful trader gave you their system which you know is highly profitable, you may or may not be able to make a profit not because you are not disciplined enough. It may not suit your trading personality.

In your journey you will discover what exactly is your trading personality. Demo trading can only go so far to prove your system works but until real money is at stake it is an entirely different experience psychologically although on paper there is no difference. That is the real discipline

Of course this is only my humble experience and journey I went through.

Good luck.

 

[adnie]

I would highly recommend Trading In A Nutshell by Stuart McPhee. It was the first book on technical analysis that I read and still the best. He's a great writer and keeps things simple.

Louise Bedford has some good books, while the Market Wizard books by Jack Schwager and How To Profit In Bull And Bear Markets by Sam Weinstein have also been brilliant books.

 

[tech/a]

I would highly recommend Trading In A Nutshell by Stuart McPhee. It was the first book on technical analysis that I read and still the best. He's a great writer and keeps things simple.

Louise Bedford has some good books, while the Market Wizard books by Jack Schwager and How To Profit In Bull And Bear Markets by Sam Weinstein have also been brilliant books.

What were the things you learnt from reading the book that you
Felt made them/it a stand out.

 

[adnie]

What were the things you learnt from reading the book that you
Felt made them/it a stand out.

The book by Stuart McPhee in particular I liked, because he really put a strong focus towards mindset and money management and he had a really simple approach. I was spending too much time looking at different indicators and entry points, when I should have been spending more time on my money management and mindset.

The Louise Bedford books I also liked because again it was a simple approach and she explained things in good detail without using all that "jargon". She also has some brilliant chapters about learning charts, also including blank charts that you had to fill in yourself, which I found a good way to learn.

As for the Jack Schwager and Stan Weinstein books, they are regarded amongst the best books ever written on technical analysis. Well the former book was less about technical analysis and more the sharemarket in general, where he interviews successful traders and finds out what works for them.

I've read more than that, but those are the ones that really stood out to me. Mark Douglas - Trading In The Zone is another good one.

 

[Joules MM1]

...i have to say - .....what's not covered in one book is in another book, and what you don't understand fully in one book is explained better in another book....

books are great arent they, inviting you to relax, sit back, afterall,
someone's already done the hard yards, gotten the experience and
you've just got the small task of having to wade thru a house-brick thick of text

easy-peasy,

just relax with a cuppa and bikkies

books are awesome



the author has made his/her dosh, so why not take every little morsel you can
soak up the experience, go for a ride on their journey, invaluable insights, yes, indeed.

and and and.....you can get one of those tablety things to tap-tap in bed on sunday mornings, yeah...rockin'
so, so, so cool

.....Priceless

phew!



and ...books are not these things:

a practical application
an interractive agent
an engaging and actively questioning device
a series of propositions or prepositions designed to test your level of knowledge
a function of intent that calls on you put something at stake, to risk something
that gives you current data, in any given phase, for the here and now

conversely, the auction process is these things:

a practical application
an interractive agent
an engaging and actively questioning device
a series of propositions or prepositions, that in-design, test your level of knowledge and skills
a function of intent that calls on you put something at stake, to risk something
that gives you current data, in any given phase, for the here and now

books are ABOUT trading (ABOUT is stressed, emphasized, in bold-type, italics and underlined)

you do not sit with right hand on mouse or pad and book in your left hand

you have not learned to drive a car, do currently, safely, drive a car or avoid accidents with a book in hand
you have not wrangled a fish, or played a tennis opponent and won thru a book
you have not played rugby, football or basketball with a book in hand

books are perfectly good at setting up solitairy scenarios, a moment in time, of specifc parametres
conversely, auctions are perfect at making the tiniest change to that scenario and taking your money

books are for defining rules, rules of engagement, for opining boundaries of ideas, for loosely
tossing an idea into the air of what's possible within the boundaries, maybe based on history, maybe not

that you dont understand one idea in one book but you do in another, speaks of two things:
that one author elocuted slightly "more thoroughly" than the previous author or that you have
time in the auction and had an ah-hah epiphany and you "saw" what they were saying

seeing and executing are two entirely different beasts
analysing and trading are two vastly separate activities

what books mostly fail to do is teach you what questions to ask, "better" still, they fail to invite into knowing HOW to ask the "right" questions, how to formulate for yourself, theyre attempting to formulate for you
not a quick-fix, fair enough but a quick-fix itself is defined by how far it can go before the truth of your knoweldge gets found out

books may only hint .....a good coach does not tell his individual team members how to play
you, learn by watching, observing the auction, observing yourself within the auction, observing how others are interacting before and after the auction, you constantly collect data in whatever form you think is obviously useful, to begin with and later, throw away what's not so obvious, you learn to throw away repeatable data that's useless, keep and improve on repeatable data that IS useful (useful, [as-in your utility] is stressed, emphasised, in bold-type, italics and underlined)

I cannot express this strongly enough:
YOU MUST WRITE YOUR OWN BOOK !! ([as-in YOUR] stressed, emphasised, in bold-type, italics and underlined)

if you take a book about trading and you acknowledge parts that are useful, that's great, it means your recognition is in top form, you have a standard IQ, you can read well, youre a smart cognizant individual

...full of engine parts, cobbled together....an engine destined to sputter, stall, run on too much fuel, keep costing new parts, new books, hold your foot in the just the right spot to make the engine run smoothly...all of that long before you realise youve just entered into the worst dodgem car event in the world...

i hope this post really gets up your nose

i hope this post shifts you out of your easy learn mode just for one minute

because you know the truth

that books are not about you or the account on the other side of your trade

books are ABOUT trading, a round-about, a rough sketch where if you squint with your left eye and close your right eye and poke out your tongue you might just hit a target with your mouse based on one of the stellar explanations you read in a book ABOUT trading, you might just pull it off because ALL the conditions laid out for you, combined with your on-the-ball precision squinted eye/tongue poking got one off
......phew, nice work,
go celebrate,
well done

.......next trade, please (stressed, emphasised, in bold-type, italics and underlined)

so, the point is, eventually, after all the books, refilling the account, more books, more chats, more endless hours of chasing other peoples opinions you'll eventually do what books cannot give you:

a clear, concise, focused book that you write yourself, a real book-build as they say
you are going to write two books:
a book of what works for you and a book of stuff that just turned out to be, well, stuff

all books are perfectly written

yes, all trading books ABOUT trading are actually ABOUT the author

books are not about how you'll trade

books do not teach you how to focus or when to focus or when the focus is misplaced or when the focus is a waste of your energy or even simply misleading

books are so utterly devoid of you what you see in the here-and-now
because theyre then-and-there-at-that-time.....mostly for the author

your book,
that you have already started,
is by far,
superior,
incisive and revealing
than you can possibly imagine
right now!

...that you have not begun to record, in a concise and focused way, right now, is going to be corrected
you are going to correct that thinking, you are going to write a series of ideas that work for you and you are going to reprint them until each idea has its own time, context and understanding about
what the auction is doing
when it is doing it
when it likely to repeat
what your context is

even in the event that you write this book, with its articulate series of chapters, you'll never know, precisely, that your interpretations led to a successful conclusion, because, even with the greatest hindsight, you cannot know that you had knowledge versus sheer coincidence and with that balance in mind, you wont care other than you got away with what someone else didnt!

write your own book

now, if you want to read a book that specifically sets out with "what does not work", then,
you'll still be reading the wrong book.....it's not your book

the only books worth reading are the ones you write

at which point does the idea(s) you've read in a book kick in, how long are you going to wait for that/those idea(s) to kick in, how do you know if the subtle/nuanced conditions/rationale has changed (if at all)
and most importantly, your own context, is that the same as the authors context from then and there to here and now? (now is underlined, in bold...you know the rest, right?)

books are priceless in so many ways, especially when youre the one paying the price

i made my first online trade in October 2002, which coincidentally, the US SP500 had just made its first major low since the march 2000 high

I read two books: The Art of Trading and both first two Wizards book

i got just enough to blow my accounts several times

I could write a book today, it would be insightful and interesting, I know it would because honesty dictates I reveal all the dum-azz things i did would have to be included for it to be thorough for someone else to enjoy and utilize

most books ABOUT trading are interesting and useful in some small way,
in a limited way,
in a restrictive way,
in a boxing-the-market way,
in a way that YOU must already have enough knowledge, to know when the ideas are going to be effective for YOU to use and by the time YOU have reached that conclusion, YOU know what?, YOU have already figured out what YOU needed to figure out.......

use your time effectively, be accountable to yourself

thing is, even though people such as Warren Buffett tell you you earn more if you learn more
what they dont tell you is that you can be your own best teacher, cos in the end you alone prove or disprove whether an idea is effective or not

begin your own book

(there's just one catch, the book is never finished and that idea/truth alone should tell you that your book is going to be better than anything you can read right now)

thankyou for reaching the end of this post and allowing room for the possibilities within that maybe useful to YOU.

 

[tech/a]

Bullseye Joules

 

[shulink]

Technical Analysis of the Financial Markets is a pretty good book for beginners. After you learn the basics, then read Japanese Candlestick Charting Techniques.

 

[adnie]

Add the book 'Trade Your Way to Financial Freedom' by Dr Van Tharp.

I just finished reading it recently and I think it's an absolute must read for anyone starting out and trying to develop a trading system from scratch. It has helped me immensely.

 

[minwa]

I see a few mentions of candlesticks. Keep in mimd they show exactly the same data as a OHLC bar chart. It actually makes whats important to me harder to visualise - open & close relationship. Personal preference though.

Many years ago I thought candlesticks were the answer and gave an edge. Picked up a few Nison courses and studied them. Did not help me. Two or three candle stick patterns dont give you an edge. Where they occur in terms of overall market price structure is more important and should you beable to identify them, you do not need candlestick patterns, most patterns will work, even fluff like momentun indicator divergences.

Just my caution before you engross yourself in candlesticks.As for what I mentioned on overall price structure, I like works of Larry Williams, Stan Weinstein, Tony Crabel, Linda Raschke.