Top 10 Best Technical Analysis Books – Technical analysis is unique in the sense that it foregoes the study of company financials, industry conditions and other information and focuses on price trends to predict future trends. Proponents of technical analysis believe that all of these factors are already accounted for in the stock prices. Technical analysis makes use of charts, graphs and other statistical methods to study historical pricing data and is considered a useful methodology, especially for day traders or short-term investors. It is true that technical analysis is not meant for everyone and most of the technical analysis book are not easy to read and comprehend either. This is precisely why we have short-listed some of the best technical analysis books written in a lucid manner, for the benefit of professionals and amateurs alike.
1) Trading Basics (Indian School of Business – ISB)
2) Trading Strategies in Emerging Markets (Indian School of Business – ISB)
3) Trading Algorithms (Indian School of Business – ISB)
4) Advanced Trading Algorithms (Indian School of Business – ISB)
#1 – Technical Analysis of the Financial Markets:
A Comprehensive Guide to Trading Methods and Applications
by John J. Murphy
A comprehensive resource technical analysis book that lays down the basic principles and concepts underlying technical analysis and how they can be successfully applied in the real world. This work is intended to help traders understand technical analysis better and become acquainted with the latest technical tools which have grown to be part of the necessary knowhow for any trader. The author explains inter-market relationships, stock rotation and candlestick charting along with other concepts and helps understand the art and science of reading charts and technical indicators to be able to make smart trading decisions. A part of the focus is on futures markets and the relevance of technical analysis while dealing in complex F&O instruments. In short, a complete guide on technical analysis for real-life traders.
Best takeaway from this best technical analysis book
- Covers a wide range of concepts on technical analysis and presents complex ideas in a highly accessible language to the average reader.
- Offers useful information on technical indicators, chart patterns and candlestick charting, supported with practical examples and a focus on the aspect of practical application.
- Excellent reference book for traders willing to learn about using technical analysis in futures markets with success.
- A must-read for traders in the true sense of the word.
#2 – Technical Analysis Explained:
The Successful Investor’s Guide to Spotting Investment Trends and Turning Points
by Martin J. Pring (Author)
Best Technical Analysis Book Review:
Known as the “Bible of Technical Analysis,” this momentous work seeks to make technical analysis an essential and inseparable part of an average investor’s investment strategy. The author offers revealing insights into the study of technical analysis as a practical and useful tool for predicting price movements and how to invest with confidence in today’s increasingly complex markets. A great deal of focus is on developing and implementing successful strategies with the help of advanced investment tools and techniques and how investor psychology shapes the markets. Readers would find useful information on how they can profit by preventing emotions from interfering with their calculated decisions.
Best takeaway from this Top Technical Analysis book
- A fairly detailed work which encompasses almost every aspect of investing in today’s markets while retaining its focus on technical analysis as an efficient approach to investing.
- Easy to read for lay readers as well as professionals to acquire an in-depth understanding of the functioning and structure of modern markets, utility of cutting edge investment tools and techniques and relevance of technical analysis.
#3 – Technical Analysis from A to Z
by B Steven Achelis
An excellent read for beginners to learn the basics of technical analysis that presents the concepts and standard terminology employed in an easy-to-understand format in the first part. Over 100 technical indicators and a wide range of commonly used chart patterns are explained in a lucid manner in the latter part of this work. What makes this work of such great utility is the methodical approach adopted by author in explaining each of the indicators and illustrating them with relevant practical examples in this top technical analysis book.
Best takeaway from this book
- An easy read meant for lay readers interested in learning basic concepts of technical analysis without a great deal of effort.
- Useful information on technical indicators and chart patterns can help a beginner get going.
- A must-read for those new to technical analysis.
#4 – Market Wizards, Updated:
Interviews With Top Traders
by Jack D. Schwager (Author)
This technical analysis book is a fascinating collection of top traders’ interviews that offer invaluable insights into some of the best minds in the industry. An interesting read for the novice as well as professional traders to learn nuances of the art of trading and enhance their risk management skills from amazing success stories of traders who were in a league of their own. This work includes the interviews of Bruce Kovner, Marty Schwartz, Ed Seykota and Tom Baldwin along with other super traders. The author has put in a great deal of effort in developing a set of guiding principles for traders based on the first-hand experiences of these traders.
Best takeaway from this Top Technical Analysis book
- One of the best informal works on trading with a rare appeal of its own.
- For the curious at heart, secrets of the super traders are revealed in an easy-to-follow manner which can help even an average trader learn how to trade with a difference.
- An interesting, informative and inspiring read for anyone with a passion for trading.
#5 – Technical Analysis:
The Complete Resource for Financial Market Technicians
by Charles D. Kirkpatrick II (Author), Julie R. Dahlquist (Author)
An extensive manual on the theory and application of technical analysis, this work is the official companion to Chartered Market Technician (CMT) program. It discusses an entire spectrum of concepts related to technical analysis including tested sentiment, momentum indicators, flow of funds, seasonal effects, risk mitigation strategies and testing systems, supported with useful illustrations and practical examples. To keep the readers updated with recent advances in the field, this work also covers advanced concepts in pattern recognition, market analysis and experimental indicators including Kagi, Renko, Ichimoku and Clouds along with novel techniques of portfolio selection among other concepts. What brings added value to the work is the rare combination of academic and practical approach to the study of technical analysis which makes it an invaluable resource for both students as well as professional traders.
Best takeaway from this Best Technical Analysis book
- As official companion to Chartered Market Technician (CMT) program, this work serves as an excellent guide for students of CMT and for Series 86 exam exemption.
- The single greatest advantage is that it covers the expansive field of technical analysis in a systematic manner, making it accessible to even an average reader.
- Practical illustrations and updated information at every step adds to the utility of this work for a trader.
- A complete knowledge resource of technical analysis in the true sense of the word.
#6 – Encyclopedia of Chart Patterns
by Thomas N. Bulkowski (Author)
An in-depth technical analysis book to chart pattern behaviour in bull and bear markets with updated information and 23 new patterns included for the benefit of readers. In addition, it includes ten event patterns and helps an average trader learn how to trade significant events including quarterly earnings announcements and stock upgrades and downgrades among other things. Each chart pattern is analyzed and discussed in detail beginning with an introduction to a specific pattern before discussing pattern behaviour, performance rank and broad identification guidelines and understanding chart pattern failures and how to avoid them. The author also discusses effective strategies to trade with the help of chart patterns and how to minimize inherent risk. Relevant statistics aids the reader understand chart pattern behaviour better and learn how to trade with confidence.
Best takeaway from this top technical analysis book
- Extensive coverage of chart patterns along with detailed nuances on identifying, interpreting and utilizing chart patterns for trading with a great deal of clarity.
- Especially useful for beginners in the field who need to be acquainted with chart pattern behaviour to be able to trade better in complex market conditions and manage risk effectively.
- A must-read for anyone interested in learning about everyday application of technical analysis.
#7 – Japanese Candlestick Charting Techniques
by Steve Nison (Author)
Widely acclaimed as a work in its own class which introduced Japanese candlestick charting techniques to the Western world at large, it is an excellent guide on the background and basic principles underlying this approach. Today, candlestick charting has become an almost integral part of any study on technical analysis and has been applied with great success by traders around the world. The author has also included information on how this innovative charting technique can be fused with a wide range of technical tools and employed as a versatile analytical tool for market analysis. This approach can be successfully adopted for analyzing futures markets, equities or speculation and hedging, showcasing the universal applicability of its principles. Supported with hundreds of examples, this work is a recommended read for every technical trader.
Best takeaway from this book
- An excellent introductory work to candlestick charts for beginners as well as professionals.
- It brings out the relevance, range and depth of technical analysis as applied to the complex markets of the day.
- This work shows how to combine this technique with any other technical tool to analyze almost any market, be it equities, futures or hedging and speculation, and trade with confidence.
- An essential reading companion for anyone interested in learning the art and science of technical analysis with candlestick charts.
#8 – Technical Analysis for Dummies
by Barbara Rockefeller
An easy-to-understand yet highly informative guide to technical analysis for an average investor or trader. The author succinctly explains basics of technical analysis and focuses on how to utilize its concepts for smart trading decisions and profit maximization. This work sheds light on how to understand current market conditions and use real data to decide which securities should one hold and which ones to sell, identifying crowd behaviour and patterns, using chart indicators and carrying out dynamic analysis among other things. The readers are also introduced to a novel method of developing a personalized analytical approach which fits in with their individual psychological profile. One of the best introductory works on technical analysis in terms of simplicity of language and lucid presentation of concepts.
Best takeaway from this book on Technical Analysis
- A simple yet masterful introductory work on technical analysis which covers a wide range of concepts that hold practical value for an average investor or trader.
- Right from drawing a trendline to studying market conditions and utilizing real data to make consistently reliable trading decisions, this work covers it all.
- To top it all, readers can easily learn how to choose analytical tools of their choice and trade with confidence.
- A recommended read for novice traders.
#9 – Elliott Wave Principle:
Key to Market Behavior
by A.J. Frost, Robert R. Prechter Jr., Charles J. Collins (Foreword by)
Technical Analysis Book Review:
An excellent analytical work on Elliott Wave principle which proposes that stock market movements can be studied with the help of patterns which come together to represent larger wave-like movements. This work describes how an understanding of Elliott wave theory can help unravel the mysteries of seemingly random stock market movements and can be used to forecast future market trends with accuracy. The authors assert that the underlying scientific principle behind this system can be found at work in nature, art and mathematics as well as in human body and go on to analyze historical ups and downs with the help of this system. An almost academic work with practical applications in finance and study of stock market behaviour.
Best takeaway from this book
- Introduces Elliott wave theory to study stock market movements and make intelligent moves in keeping with the emerging patterns.
- On a realistic level, technical analysts have employed this method along with other technical tools and it would be best not to rely on it in isolation while making investment choices.
- Not one of the easiest reads for even a trader but worth the time spent if one wishes to learn the inherent patterns underlying stock market behaviour.
#10 – Technical Analysis of Stock Trends
by Robert D. Edwards, John Magee
A masterpiece on technical analysis that is nothing less than an in-depth exposition on chart pattern analysis along with a detailed discussion on evolution of the dow theory and how it can be replaced with a viable alternative. Originally published in 1948, this work continues to be an important resource for chartists, focusing on vertical bar charts and stressing their utility for market analysis. The latest edition of the work includes a great deal of updated information on the subject including an expanded version of pragmatic portfolio theory and Leverage Space Portfolio Model among other concepts. In short, a true classic for technical analysts and chartists.
Best takeaway from this book
- Special focus on vertical bar charts and how a chartist can utilize them to their advantage in everyday trading.
- Contains extensive information on chart pattern analysis, making it an excellent reference work for novice and expert chartists alike.
- Updated with the latest theories, tools and techniques to bring added relevance to the work in today’s markets.
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