A good & complete TA book

M

missing-link

I am looking for a good complete book about TA. The two that stand out so far are "Technical Analysis of the Financial Markets" by John J. Murphy and "Technical Analysis of Stock Trends" By Robert Edwards and John Magee. Which of the two would you prefer or maybe you have a better recommendation

Missing-Link
 
...as a counter example, let me suggest you read the review on Amazon of "The Encyclopedia of Trading Strategies" by Katz and McCormick. It really is a book about system development, but reading it might convince you that most TA is total crap. My advice is to forget the books and study the market in real time. Teach yourself, and you'll find out things few others know. As Lao Tzu is reported to have said: "Those who know do not speak. Those who speak do not know." Most published TA books aren't worth lighting a fire with. Best regards. - Mike
 
Depends on how you define "TA". If you define it as charting, then Edwards and Magee (or Schabacker, on whom their work is based) will be more suitable. If you define it in terms of indicators, then Murphy will more likely be your cup of tea. Or, if you're at the stage where you want to investigate all of it, then study both (I say "study" rather than "read" because these are not books you just curl up with and absorb with one run-through).

After that, Achelis' reference work is available on line. This provides information on what the indicators are supposed to do and usually explains how they're calculated: http://www.equis.com/free/taaz/index.html

After that, it's a matter of deciding for yourself what works and what doesn't within the context of your system or the system you're trying to develop. One of the most practical ways of testing indicators is to go to stockcharts.com or use your own software, if you have any, and plot 5 or 6 indicators all at the same time, determining for yourself which tell you what you want to know and which don't. Once you have a promising selection, use them in real-time, paper-trading, in order to determine whether or not they enable you to make the correct choices AT THE TIME (if they're all late, they aren't going to be of much help in actual trading).

I've probably over-answered your question, but there it is.
 
Quote from hypostomus:

...as a counter example, let me suggest you read the review on Amazon of "The Encyclopedia of Trading Strategies" by Katz and McCormick. It really is a book about system development, but reading it might convince you that most TA is total crap. My advice is to forget the books and study the market in real time. Teach yourself, and you'll find out things few others know. As Lao Tzu is reported to have said: "Those who know do not speak. Those who speak do not know." Most published TA books aren't worth lighting a fire with. Best regards. - Mike
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I disagree, hypostomus. I think that most published TA books are indeed worth lighting a fire with.
 
Quote from missing-link:

I am looking for a good complete book about TA. The two that stand out so far are "Technical Analysis of the Financial Markets" by John J. Murphy and "Technical Analysis of Stock Trends" By Robert Edwards and John Magee. Which of the two would you prefer or maybe you have a better recommendation

Missing-Link
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Not to be a dick, but I would start with

A Random Walk Down Wall Street, Completely Revised and Updated Edition
by Burton G. Malkiel, if you haven't already read it.

90% of the traders that bash it have never read it, and while almost all of us here belive technical analysis has some merit, the most experienced of us likely agree that for the most part price patterns are highly random and therefore alot of TA buy and sell signals are highly random as well.

With regard to the two you mentioned. Edwards and Magee's book is a grind to get through. They take 3 pages sometimes to say what could be espoused in 3 paragraphs. Murphy's book can be read in 1/5th the time and it probably covers 90% of the other one. So of the two I would go with Murphy's.

FWIW, Murphy's Intermarket Analysis book is considered pretty good. I think it needs to be updated but, as far as trading goes, the ideas in that book have probably made traders more money than his first one.
 
If you are a total newbie then I'd recomend Charting Made Easy by John Murphy and also 7 Chart Paterns that make money by Ed Downs. These 2 books are only like 60 pages each, really small and very easy reading and really cheap. But they tell you the basics of TA and don't have any extra b.s. in them. Then get the other 2 books and study the markets and APPLY the info that you learn and try to find examples. One thing I've learned is that when I started that if it says that a triangle has 5 waves, then I'd only count a 5 wave triangle and all the other "close calls" were nothing. TA is not totally black or white. You've got to learn that there is a little room for seeing a pattern etc. Hope this helps.
 
...I agree with you about the Schabacker. The best thing to read if you MUST read TA. His earlier cynical book on market dynamics is priceless, too. Also, Alan Farley's book is great, but I wouldn't call that TA. To me it's pattern recognition, which is the essence of mechanical system development.
 
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