Essentials of Technical Analysis for Financial Markets is an all-encompassing handbook on navigating the financial markets successfully using technical analysis. Clearly written, easy-to-understand, and straightforward, this guide focuses on the key information needed by traders and investors to take on any financial market effectively.
Technical analysis is the study of how past and present price action in a given ﬁnancial market may help determine its future direction. At the same time, however, technical analysis should not be considered a crystal ball. Rather, the skills of a technical analyst are used primarily to help determine the highest-probability reactions to past and current price movement, as well as likely future price movement. Therefore, technical analysis is less about actually predicting the future and more about ﬁnding high-probability potential opportunities to trade in the ﬁnancial markets.
The primary tool used by technical analysts is the ubiquitous price chart, which generally plots prices over a given period of time. The various major chart types are discussed in detail in Chapter 4, which covers the basics of technical analysis. Different analysts/traders may choose to use different types of charts at different times, whether it is a line chart, a bar chart, a candlestick chart, a point-and-ﬁgure chart, or any of a number of other chart types.
The methods of utilizing technical analysis are many and varied. They include such ubiquitous concepts as head and shoulders, support and resistance, trends, moving averages, and double-tops. But they also include concepts that are less popularly known, such as linear regression, bullish engulﬁng patterns, Elliott Wave, and point-and-ﬁgure charts. All of these elements of technical analysis, and much more, are discussed in the pages of this book.
The main focus of this book is to provide the essential knowledge about technical analysis that is necessary to begin serious analysis of any major ﬁnancial market. With that goal, this book outlines and describes the primary tools used by technical analysts and traders. Of course, technical analysis is a huge subject that is growing every day, and no book could ever hope to cover all of the information within the ﬁeld adequately. Therefore, this book provides substantial coverage of the essentials, as the title suggests, while necessarily omitting some of the more esoteric concepts in the ﬁeld.
- Introduction to Technical Analysis: Pursuing Profit in the Financial Markets
- The Story of Technical Analysis: From the Japanese Rice Markets to Dow Theory to Automated Trading
- The Power of Technical Analysis: Principles of Price Action
- The Basics of Technical Analysis: Bars, Candlesticks, Lines, and Point and Figure
- The Heart of Technical Analysis: Uptrends and Downtrends
- The Soul of Technical Analysis: Support and Resistance
- Primary Drawing Tools: Trend Lines, Trend Channels, and Horizontal Support and Resistance
- Chart Patterns: Bar Shapes and Candlestick Formations
- The World of Moving Averages
- Key Technical Indicators and Oscillators
- Fibonacci and Elliott Wave
- Point-and-Figure Charting
- Technical Trading Strategies: Practical Applications
- Risk Control and Money Management