Technical Analysis for the Trading Professional is the number-one go-to guide for market technicians seeking to improve their market timing skills with the most up-to-date tools and techniques. This second edition provides an updated look at unique formulas and key indicators, while retaining all the foundational material that made the previous edition an instant classic.
Introduction:
Written by a brilliant trader for only those seasoned traders who are willing to work at their analysis of the markets in a disciplined way, this book contains the most advanced methodology I’ve ever seen! Connie Brown’s credentials come in the form of nine years on the front line as a research analyst and fund trader. She is herself a disciplined professional, who has grown to the point where she is a force to reckon with in the financial markets. At the same time, she publishes a daily bulletin on the Dow, the S&P, and Bonds. This is faxed to some of the world’s most sophisticated, large traders. Her predictions as to price objectives and trend of the market are unequaled anywhere in the industry.
There are 14 separate chapters in this book, each a separate subject. Six of these subjects have been written on before, and these chapters serve as improvements on old indicators. There are, also, 15 major breakthroughs in technical analysis! Seven of these breakthroughs are new—never-before-revealed material! Eight more dissect, change, and improve old concepts.
In her discussion of Stochastics and of RSI as oscillators, she introduces the concept that oscillators do not necessarily fluctuate between 0 and 100 and that all signals do not fall within the traditional default overbought and oversold bands. The oscillator may actually travel within a larger or a narrower range that can be pinpointed with precision. To correct what the writer perceives as a flaw in commercial software packages, she suggests the use of an upper resistance band and a lower support band within this range to help identify signals that might otherwise have been missed. She also introduces the concept that this effective signaling band may travel up and down within the range, and that it may expand or contract. She suggests that the trader should adjust this effective signaling range to compensate for the idiosyncrasies of strongly trending bull and bear markets, and even suggests some better parameters! This alone would change the way we look at oscillators—and, consequently, our entry timing.
But this inventive young trader does not stop there. She goes on to discuss the application of moving averages over oscillators, third-generation indicators created by applying oscillators on oscillators, and filtering indicators with variants of different lengths. She introduces the Composite Index she created to accompany RSI. In a theme she returns to frequently, she kids the “Stochastics Default Club”—both the uneducated public that accepts the default values in software and tries to use them to trade without a clue as to why, and the educated but lazy trader who knows better but does it anyway. She remedies this deficit by giving a great deal of attention to procedures for determining and inputting the proper data to construct responsive, customized indicators. She makes a passionate case for keeping a flexible state of mind.
Contents:
- Oscillators Do Not Travel between 0 and 100
- Dominant Trading Cycles Are Not Time Symmetrical
- Choosing and Adjusting Period Setup for Oscillators
- Dominant Trend Lines Are Not Always from Extreme Price Highs or Lows
- Signals from Moving Averages Are Frequently Absent in Real-Time Charts
- Adjusting Traditional Fibonacci Projections for Higher Probability Targets
- Price Projections by Reverse-Engineering Indicators
- Price Objectives Derived from Positive and Negative Reversals in the RSI
- Gann Analysis: Calculating Price and Time Objectives
- Using Oscillators with the Elliott Wave Principle
- Volatility Bands on Oscillators
- The Composite Index
- The Principles of Depth Perspective Applied to Two-Dimensional Charting
Technical Analysis for the Trading Professional: Strategies and Techniques for Today’s Turbulent Global Financial Markets By Constance M. Brown pdf
