Looking for a great book or two on technical chart analysis.
- Thread starter Giddiyup
- Start date
Sure. Whats the name of the book? I'm in sponge mode.
Also I have a statistical analyst in the house so she might come in handy.
Google “modeling financial time series”.
Technical Analysis of STOCKS & COMMODITIES magazine. Also a good source of trading ideas, some of the authors seem to come from deep scientific background.
These are my favorites, been using classic T.A. since the mid 90's. You can find the free PDFs for all of them except Schabacker.
Richard Wycoff technique (this link is all you need)
https://stockcharts.com/school/doku.php?id=chart_school:market_analysis:the_wyckoff_method
These are a bit more relevant to the times
Alan Farley 'Master Swing Trader & Toolkit
Bulkowski 'Getting Started in Chart Patterns'
Books from the old masters/pioneers
Richard Schabacker 'TA of Stock Market Profits'
John Murphey 'TA of Financial Markets'
Richard Wycoff technique (this link is all you need)
https://stockcharts.com/school/doku.php?id=chart_school:market_analysis:the_wyckoff_method
These are a bit more relevant to the times
Alan Farley 'Master Swing Trader & Toolkit
Bulkowski 'Getting Started in Chart Patterns'
Books from the old masters/pioneers
Richard Schabacker 'TA of Stock Market Profits'
John Murphey 'TA of Financial Markets'
T/A is for the most part a useless endeavor unless the practitioner has a very deep understanding of what a particular study is sampling and what message it is conveying about market behavior. I’ve seen far more bad applications and mistakes using T/A as compared to wise judicious use.
The first thing to know about T/A are the limitations and shortcomings for each particular study - and there are many. There is also the matter of incorrect usage of sampling timeframes, and poorly designed study signal confirmation.
I’ve seen people use T/A for years without trying anything beyond the default settings. Most clients I take on have no understanding of TIME as it relates to the micro and macro architecture of TREND. I’ve seen people confirm a MACD signal with an RSI study - there are only three basic types of technical study, and it does you no good to confirm Ben & Jerry’s Vanilla with Breyer’s Vanilla (they’re both Vanilla). I’ve seen people claim to be trading trend using tic and one minute data. People give credence to DOM window data (depth-of-market) and interpretation but have no apparent appreciation for the spoofing, flipping, order crossing, stacking, and all the subversive gamesmanship that is now a reality with electronic markets. It’s a fools errand to take DOM data at literal face value.
There are many traps with the application of T/A - and I’ve mentioned numerous times in other posts about how T/A lures the practitioner into a false sense of security and even gross negligence regarding position management. Do NOT use an on-the-run technical study as a substitute for position management.
And 7 times out of 10 it is piss poor position management that dooms a trader.
The first thing to know about T/A are the limitations and shortcomings for each particular study - and there are many. There is also the matter of incorrect usage of sampling timeframes, and poorly designed study signal confirmation.
I’ve seen people use T/A for years without trying anything beyond the default settings. Most clients I take on have no understanding of TIME as it relates to the micro and macro architecture of TREND. I’ve seen people confirm a MACD signal with an RSI study - there are only three basic types of technical study, and it does you no good to confirm Ben & Jerry’s Vanilla with Breyer’s Vanilla (they’re both Vanilla). I’ve seen people claim to be trading trend using tic and one minute data. People give credence to DOM window data (depth-of-market) and interpretation but have no apparent appreciation for the spoofing, flipping, order crossing, stacking, and all the subversive gamesmanship that is now a reality with electronic markets. It’s a fools errand to take DOM data at literal face value.
There are many traps with the application of T/A - and I’ve mentioned numerous times in other posts about how T/A lures the practitioner into a false sense of security and even gross negligence regarding position management. Do NOT use an on-the-run technical study as a substitute for position management.
And 7 times out of 10 it is piss poor position management that dooms a trader.
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Barry Rudd - Stock Patterns For Day Trading And Swing Trading
didn't read it yet, but heard it's very good
Majority of traders, especially newbies, fail due to their lack of understanding of what TA is truly about and how it works. They think that by reading TA books from best authors would automatically make them a trader. The worst part is after years of trading and failing, they still don't have a clue how to use the tools properly.
They also don't even have a clue what data mining, modeling and testing mean and how to apply these in TA to develop trading systems to make money. That sounds too complicated to them and hence, most of them don't even bother to learn. I guess this is where only few could come up with trading systems to make money while others continue to struggle over and over again for decades without able to succeed.
I used to hate myself for wasting four years to obtain a major and minor degree in computer science and math from one of the top universities in Canada, instead of dentistry or medical school which my ex went. When I look back sometimes these years, I've no regret because without it, I would not be able to get jobs in banking industry as well as applying these knowledge and skillsets into TA to help me become a far much better trader. IMO, those with background in engineering, comp sci and maths are more likely to succeed in trading than the rest. Why? Because they went through a lot of training in order to develop skills in researching, data mining (i.e. writing algorithms to develop applications) and testing which enable them to think differently than others when it comes to apply TAs to trade. Also, they like to dig deep to understand things and logics behind it before using it.