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What Are The Best Technical Analysis Books?

by George Windsor Updated: Investing

best technical analysis books

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Making money in the stock market is no mean feat. Any novice trader knows the perils of finding a method that has stood the test of time. And while no holy grail may exist, technical analysis has a lot to offer.

Technical analysis is a broad category of stock market analysis designed to forecast future share price movements.

It can be as simple as looking at price and volume movements or as complex as fractal analysis.

The topic is so vast that it is hard to know where to begin, which is why we compiled a list of the best technical analysis books to help you accelerate your quest to identify a trading strategy that works well for you.

1 – Technical Analysis
of the Financial Markets

Among the very best technical analysis books is John Murphy’s classic, called Technical Analysis of the Financial Markets.

John Murphy is one of the most renowned technical analysts. He has appeared on Bloomberg, CNBC, and CNN as well as many other financial TV shows, and is the face of StockCharts.com, a financial information site featuring technical analysis tools.

Technical Analysis of the Financial Markets is the gold standard of technical analysis books. It is perhaps the most comprehensive book of its kind.

Unlike some other books, it is not too wordy yet at the same time it’s a complete resource.

You won’t simply discover technical analysis concepts, you will also discover their applications to futures and stock markets.

From technical tools and indicators to computer technology, the book covers all the essentials needed to objectively analyze stock charts.

You will learn about Japanese Candlesticks, intermarket relationships, and the rotation of stocks among many other topics.

So, whether you are looking to perform stock technical analysis or bitcoin technical analysis, you will have the tools you need to make more informed decisions.

What You Will Learn

Just a sampling of what you will learn in John Murphy’s Technical Analysis of the Financial Markets is shown below:

Dow Theory
  • Stocks as economic indicators
  • Dow Theory applied to futures trading
Chart Construction
  • Candlesticks
  • Arithmetic vs logarithmic scale
  • Daily bar charts
  • Volume
  • Futures open interest
Basic Concepts of Trends
  • Trendlines
  • Support & resistance
  • The Fan principle
  • The Channel line
  • Retracements
  • The importance of the number 3
  • Gann & fibonacci lines
  • Reversal days
  • Price gaps
Major Reversal Patterns
  • Price patterns
  • Head & shoulders reversal patterns
  • Inverse head & shoulders
  • Complex head & shoulders
  • Triple tops and bottoms
  • Double tops and bottoms
  • Saucers and spikes
  • The importance of volume
Continuation Patterns
  • Symmetrical triangles
  • Ascending triangles
  • Descending triangles
  • The broadening formation
  • Flags and pennants
  • Wedge formations
  • Rectangle formations
  • The measured move
  • Confirmation and divergence
Volume & Open Interest
  • Volume & open interest
  • Blowoffs and selling climaxes
  • Open interest in options
  • Put/call ratios
  • Sentiment & technicals
Long Term Charts
  • Long term vs short term charts
  • Continuation charts for futures
  • Importance of longer range perspective
  • The Perpetual ContractTM
Moving Averages
  • Moving average envelopes
  • Bollinger bands
  • Moving averages tied to cycles
  • Fibonacci numbers used as moving averages
  • Band width measures volatility
  • The weekly rule
  • Adaptive moving averages
  • Alternatives to the moving average
Oscillators & Contrary Opinion
  • Measuring momentum
  • Measuring rate of change (ROC)
  • Constructing an oscillator using two moving averages
  • Commodity channel index
  • Relative strength index (RSI)
  • Using 70 and 30 lines to generate signals
  • Stochastics (K%D)
  • Larry Williams %R
  • The importance of trend
  • Moving average convergence/divergence (MACD)
  • MACD histogram
  • Investor sentiment readings
  • Investors intelligence numbers
Point & Figure Charting
  • Point & figure versus the bar chart
  • The horizontal count
  • Price patterns
  • Measuring rate of change (ROC)
  • Commodity channel index
  • Measuring techniques
  • Trading tactics
  • Computerized P&F charting
Japanese Candlesticks
  • Basic candlesticks
  • Candle pattern analysis
  • Filtered candle patterns
Elliott Wave Theory
  • Basic tenets of Elliott Wave Principle
  • Corrective waves
  • The rule of alternation
  • Channeling
  • Wave 4 as a support area
  • Fibonacci ratios & retracements
  • Fibonacci time targets
Time Cycles
  • Dominant cycles
  • Combining cycle lengths
  • Left and right translation
  • How to isolate cycles
  • Seasonal cycles
  • Stock market cycles
  • The January barometer
  • The Presidential cycle
  • Maximum entropy spectral analysis
  • Cycle reading and software
Computers & Trading Systems
  • Welles Wilder’s parabolic and directional movement systems
  • Pros and cons of system trading
Money Management & Trading Tactics
  • Three elements of successful trading
  • Money management
  • Reward to risk ratios
  • Trading tactics
  • Types of trading orders
  • Intraday pivot points
  • Application to stocks
  • Asset allocation
  • Managed accounts and mutual funds
The Link Between Stocks and Futures
  • Intermarket analysis
  • The link between bonds and stocks
  • The link between bonds and commodities
  • The link between commodities and the dollar
  • Stock sectors and industry groups
  • Dollar and large caps
  • Intermarket correlation
  • Neural network software
  • Deflation scenario
Stock Market Indicators
  • Measuring market breadth
  • Comparing market averages
  • The Advance-decline line
  • AD Divergence
  • Daily versus weekly AD lines
  • McClellan oscillator
  • McClellan summation index
  • New highs versus new lows
  • Upside versus downside volume
  • The ARMS Index
  • Equivolume charting
  • Candlepower
Advanced Technical Indicators
  • Technical checklist
  • Chartered market technician (CMT)
  • Market technicians association (MTA)
  • Demand index (DI)
  • Payoff index (HPI)

2 – Charting & Technical Analysis

Charting & Technical Analysis by Fred McAllen is one of the very best technical analysis books for analyzing stocks, options, and forex markets, as well as mutual funds.

What distinguishes Charting & Technical Analysis from many other technical analysis books is the in-depth focus on who is buying and who is selling.

Fred McAllen’s book doesn’t simply spotlight charts with 20/20 hindsight perspective about where optimal buy and sell points are but goes further to explain how to identify when tops and bottoms are forming.

The clear focus of the book is empowering traders with knowledge to make more informed trading decisions.

Even if you are not an active trader but invest in mutual funds, the book is a valuable.

You will learn about the tricks of financial advisors and salespersons to earn commissions from mutual funds and how advancing your own knowledge can be a money-saver.

If you have been struggling to decipher and analyze stock charts, this book is a virtual must-read.

What You Will Learn

Japanese Candlesticks
  • Support, resistance, and trends
  • Trend lines
  • Chart patterns
  • Reversal patterns
  • Inverted head & shoulders patterns
  • Double tops and bottoms
Saucers and Spikes
  • Continuing patterns
Flags & Pennants
  • Bull flag
  • Bear Flag
  • Pennants
Price Gaps
  • Exhaustion gaps
The Key Reversal Day
  • Percentage retracements
The Interpretation of Volume
  • On-Balance Volume
  • OBV Breakouts
  • Other volume indicators
Short & Long-term Views
  • Top-down market approach
Moving Averages
  • Popular moving averages
  • Stochastics
  • Any time dimension
Options
  • Option put/call ratio
Stop Losses
  • Trailing stop/loss order

3 – How To Day Trade For A Living

How To Day Trade For a Living is a fascinating book not only in the knowledge it imparts but also because of the compelling narrative that led Andrew Aziz to write it.

Aziz had a PhD in Chemical Engineering from the University of British Columbia but despite his qualifications he was informed during the stock market crash of 2009 that he was no longer needed as an employee.

He decided to dedicate his future to learning day trading strategies and that journey led him to ultimately write How To Trade for a Living, a book that helps others to find stocks to day trade, the best brokers for day trading, and the best software for day trading.

What You Will Learn

Day Trading Strategies
  • ABCD pattern trading
  • Bull flag momentum trading
  • Top reversal trading
  • Bottom reversal trading
  • Moving average trend trading
  • VWAP trading
  • Support & resistance trading
Timing
  • When to enter and exit trades
  • Defining stop losses
Trading Psychology
  • How to control emotions trading
Money Management
  • How manage risk and reward
Trading Tools
  • Which software is best for day traders?
Best Brokers For Day Trading
  • Which brokers are best for day traders

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4 – Technical Analysis Explained

If you want to understand technical analysis for stock trends, Martin Pring’s Technical Analysis Explained has stood the test of time as a proven resource.

The book was first published decades ago and continues to be a bestseller with good reasons.

It is widely regarded as the Bible of technical analysis because it is so comprehensive.

Indeed, it is designed to give you everything you need to forecast accurately how investors will respond to future events based on how they have statistically responded in the past.

Regardless of whether you trade stocks, ETFs, or commodities, Pring blends the art and science of technical analysis well.

Pring expands beyond stock analysis and focuses on ETFs and how to analyze them.

He also describes in detail his proprietary Pring Special K Indicator.

What You Will Learn

Trend-Determining Techniques
  • Market Cycle model
  • Financial markets and the business cycle
  • Dow theory
  • Parameters for intermediate trends
  • Price patterns
  • One-and-two bar price patterns
  • Trendlines
  • Moving averages
  • Momentum principles
  • Momentum indicators
  • Candle charts
  • Point and figure charting
  • Relative strength
Market Structure
  • Price: major averages
  • Price: group rotation
  • Longer time cycles
  • Volume oscillators
  • Breadth
Market Behavior
  • Why interest rates affect stock market
  • Sentiment indicators
  • Technical analysis & contrary opinion
  • Identifying market peaks and troughs
  • Automated trading systems
  • Technical analysis of global stock markets
  • Technical analysis of individual stocks
Elliott Wave
  • Theory of Elliott Waves

5 – Japanese Candlestick
Charting Techniques

Steve Nison has long been regarded as one of the leading authorities on Japanese Candlesticks trading.

In Japanese Candlestick Charting Techniques, he walks readers step by step through the theory and practice of this eastern method of investment analysis.

Whether you are looking to gain an edge in futures or equities trading, or simply in hedging and speculation, Japanese Candlestick Charting Techniques is a one-stop guide.

It covers the basics of Japanese Candlestick charting techniques as well as advanced methods that can be applied to almost any market.

For traders who like to learn through application, hundreds of examples are shown throughout the book.

What You Will Learn

Japanese Candlesticks Basics
  • Background of candle charting techniques
  • How to construct candlestick lines
Reversal Patterns
  • Umbrella lines
    • Hammer
    • Hanging man
  • Engulfing pattern
  • Dark-cloud cover
  • Piercing pattern
Star Patterns
  • Morning star
  • Evening star
  • Morning and evening Doji stars
  • Shooting star
  • Inverted hammer
Reversal Patterns
  • Harami pattern
  • Harami cross
  • Belt-hold lines
  • Upside-gap two crows
  • Three black crows
  • Three advancing white soldiers
  • Three mountains and three rivers
  • Counterattack lines
  • Dumpling tops and frypan bottoms
  • Tower tops and bottoms
Continuation Patterns
  • Windows
  • Tasuki
  • High-price gapping
  • Low-price gapping
  • Rising and falling three methods
Dojis
  • Northern doji
  • Long-legged doji
  • Gravestone doji
  • Dragonfly doji
  • Tri-star
Candles with Trend Lines
  • Springs and upthrusts
  • Change of polarity principle
Candles with Moving Averages
  • Simple moving average
  • Weighted moving average
  • Exponential moving average
  • Applying moving averages
Candles with Oscillators
  • Relative strength index
  • Moving average oscillator
  • Stochastics
  • Moving average convergence-divergence (MACD)
Measured Moves
  • Breakouts from boxes
  • Swing targets
  • Flags
  • Pennants

6 – Technical Analysis For Dummies

If you are a newbie wanting to learn technical analysis from the ground up, Technical Analysis for Dummies is a great place to start.

The book is a step-by-step guide to help you identify stock market trends and spot turning points in order to make decisions in real-time.

The ultimate goal of the book is to help you to improve your portfolio performance through a deep understanding of technical analysis.

Whether you are looking to perform cryptocurrency technical analysis, gold technical analysis, forex technical analysis, crude oil technical analysis or simply plain vanilla equities analysis, Technical Analysis for Dummies is a comprehensive resource.

What You Will Learn

Technical Analysis Toolbox
  • Introduction to technical analysis
  • Charting
  • Market timing
The Essence of Market Movement
  • Identifying crowd behavior
  • Trading mean conversion
  • Retracements
Market Sentiment
  • Tracking on-balance volume
  • Key reversals
  • Volume indicators
The Art of Trading
  • Choosing your trading style
  • Classifying indicators
  • How indicators work
  • Choosing indicators
  • Risks of backtesting
Managing The Trade
  • Building a trading plan
  • Stop loss orders
  • Adding & reducing positions
Reading Basic Bars
  • Identifying an uptrend and downtrend
  • Selecting time frames
Market Behavior
  • Tick and bar placement
  • Trading range
  • Identifying common special bars
  • Filling the gap
  • Average trading range
Japanese Candlesticks
  • Dojis
  • Identifying emotional extremes
  • Reversal patterns
  • Continuation patterns
Pattern Analysis
  • Ascending and descending triangles
  • Double bottoms and double tops
  • Head and shoulders
  • Gaps and retracements
Drawing Trendlines
  • Support and resistance lines
  • How to use linear regression
  • Breakouts and false breakouts
  • Using resistance to enter and exit
Channel Analysis
  • Channel-drawing basics
  • Analyzing breakouts
  • Linear regression analysis
  • Pivot support and resistance
Dynamic Analysis
  • Simple moving averages
  • Exponential moving averages
  • Multiple moving averages
  • MACD analysis
Measuring Momentum
  • How to calculate momentum
  • Applying momentum
  • Determining relative strength index
  • Stochastic oscillators
  • %K and %D indicators
Estimating Volatility
  • Low volatility with and without trending
  • High volatility with and without trending
  • Standard deviation
  • Average true range bands
Point-and-Figure Charting
  • Applying pattern analysis
  • Constant range bars
  • Combining point-and-figure techniques with other indicators
Cycles and Waves
  • Financial cycles
  • Seasonality
  • Gann 50 retracement
Secrets of Top Technical Traders
  • Learn your expectancy
  • The trend is your friend
  • Diversify
Rules for Working with Indicators
  • Use support and resistance
  • Follow the breakout principle
  • Embrace patterns

What do you think of fundamental analysis vs technical analysis? Do you apply stock technical analysis when making investment decisions? Let us know if you read other great technical analysis books that we missed.

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