The New Science of Technical Analysis

The New Science of Technical Analysis  is filled with innovative, creative, and clever new ideas on technical analysis. Tom DeMark has done a wonderful job of turning subjective techniques into objective strategies and tactics. DeMark’s work as a consultant has been restricted to large institutions and many of the legendary traders in the world today. By sharing his creative ideas with us, as well as his passion for precision and improvement, Tom DeMark’s emphasis on the ‘new science’ of technical analysis helps push the technical frontier another step forward. With the unprecedented attention now being paid to technical analysis, this new book couldn’t have come at a better time.

Author’s Note:

I recommend that, as you read this book, you con­centrate on and introduce into your trading regimen only those elements with which you feel comfortable and which are compatible with your trading style. Most of the techniques and ideas presented in the fol­lowing chapters reinforce one another, but they are so dissimilar that you may elect to study and perfect only a few at a time. Keep in mind that these ideas evolved over a period of more than 23 years spent in market research, as both a vocation and an avocation.

Conse­quently, mastery of these topics should not be ex­pected immediately; they will require your undivided attention and total concentration. I suggest that you maintain a reasonable pace studying the numerous techniques and concepts presented and that you not be discouraged by an inability to totally grasp all the details and nuances of the subject matter immedi­ately. The format in which the various topics are pre­sented allows for both intensive and comprehensive study. At the same time, because of the diverse nature of the chapters, you are afforded the opportunity to concentrate only on areas that are of specific interest, without the necessity of referring to and understand­ing other unrelated information.

Most of the ideas and concepts presented through­out this book are unconventional, unorthodox, and for­eign to what most traders have learned and practiced in the past. They are original, fresh, and they cover many areas of the discipline of market timing analysis. In some circles, I expect, I will be characterized as a trading iconoclast who is shattering many time-worn practices and norms. My only wish is that readers accept these novel approaches in the context in which they are both intended and presented. They are new and exciting investment timing tools designed to sup­plement, to upgrade, and to complement the current group of trading methods. For beginning traders, the book will provide a solid and valid foundation on which to develop a trading research background.

The techniques described in this book have been prepared and designed for a trading audience. My ex­perience confirms that most of the concepts discussed have universal application with equal success to other fields wherein any series of data or graphic presenta­tions are readily available and studied. I believe that almost any discipline that can be quantified and that lends itself to trend analysis is a potential candidate for this type of research discussion and application. Specifically, I have calculated retracements, projec­tions, and objectives for data in diverse areas ranging from interest rates and other economic statistics to forecasts of the migration trends of birds. I encourage you to examine thoroughly and critically my trading techniques and, should you desire, to experiment with and explore the possibilities of their application to other fields. At the same time, I challenge you to make enhancements to my research. My biggest complaint has always been that most traders are like the split ends on football teams rather than the quarterbacks: they are capable only of receiving information, not of supplying it.

I have witnessed the evolution of market timing research from a simple Bowmar calculator to the cur­rent preoccupation with such exotic, high-technology analyses as artificial intelligence, chaos theory, opti­mization models, neural networks, and so on. The on­slaught of this advanced mathematical theory and of elaborate computer capabilities has fostered a disin­terest in uncomplicated, basic, “blue-collar” market timing techniques and devices. However, even as these sophisticated approaches have instilled a false sense of trading security, they have failed to reward their advocates with markedly improved performance re­sults. Consequently, I predict a return to the simple, pure analytical approaches and hope that this book and the trading suggestions contained in it serve as a catalyst to expedite this revival.

Contents:

• Trendlines
• Retracements
• Overbought/Oversold
• Wave Analysis
• Accumulation/Distribution
• Moving Averages
• Sequential™
• Gaps
• Daily Range Projections
• Rate of Change
• Equities
• Options
• “Waldo” Patterns

The New Science of Technical Analysis By Thomas R. DeMark pdf