The technical analysis industry is expanding at an exponential pace. A few years ago, an Internet search for the term “technical analysis” returned 206 million responses. Now it returns 1.36 billion responses. Even after weeding out duplicates and mismatches, it’s still a huge amount of material. Don’t be intimidated by the sheer size of the available material. In Technical Analysis For Dummies, Barbara Rockefeller covers the core concepts, most of which you could apply today with no further research. If you were to explore the most advanced entry in the 1.36 billion entries, most of it would be familiar to you from reading this book.
Timing can be everything. Timing is critical in cooking, romance, music, politics, farming, and a hundred other aspects of life on this planet. Putting money into a securities market — and taking it out with a gain — is no different: You need good timing to get the best results. Technical traders all over the world, amateur and professional alike, earn a living using technical analysis to time their trades in many different markets. And they’re still standing after a market crash, unlike many so-called value investors. In this book, I try to explain how they do that and how you can do it, too.
Technical ideas range from the super simple to the tremendously complex. I cover the core concepts that are the building blocks of all, or nearly all, of those tremendously complex systems. It’s up to you to choose to stay with one of two simple ideas or forge onward to the complex. There is no single best technical idea or combination of ideas, for reasons I explain. Technical analysis is not only a set of tools. It’s also a mindset, a way of looking at securities prices and how they wag and what wags them.
The first principle of the technical mindset is to throw conventional wisdom out the window and trade what you see on the chart. Technical analysis is an evidence-based method of making trading decisions, which means you won’t be consulting earning per share, cash flow, management quality, or any of the other fundamentals that lead to an assessment of value. Technical analysis isn’t value investing. Value investing would have you continue to hold a high-value security despite a big drop in price. The technical analysis trader will sell it, knowing he can always come back after the price bottoms and starts recovering.
- Introducing Technical Analysis
- Tapping into the Wisdom of the Crowd
- Trade What You See: Market Sentiment
- Gaining Critical Advantage from Indicators
- Managing the Trade
- Reading Basic Bars: How to Pounce on Opportunities
- Special Bars — An Early Warning System
- Redrawing the Price Bar: Japanese Candlesticks
- Seeing Patterns
- Drawing Trendlines
- Transforming Channels into Forecasts
- Using Dynamic Lines
- Measuring Momentum
- Estimating Volatility
- Ignoring Time to Create Better Timing
- Combining Techniques
- Judging Cycles and Waves
- The Mind-Blowing Ichimoku
- Ten Secrets of the Top Technical Traders
- Ten Rules for Working with Indicators