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Technical Analysis Plain and Simple: Charting the Markets in Your Language, Third Edition

Book Description

“This book is an excellent primer. As a proponent of the art-versus-science school of technical analysis, his primary focus is on the practical aspects of chart reading and how to translate the intelligence derived from charts into investment decisions. If you have ever wondered what technical analysis is, or how you could get started doing it, this is a good place to start.”

JohnBollinger, CFA, CMT, President, Bollinger Capital Management

“Here is the place to discover why the RSI goes up while the price is going down, how to measure potential moves from a breakout, how not to look at a chart with preconceived notions of what the market will do--‘Let the market talk....’ The advice is above all practical. [This is] a book to own, particularly in the earlier stages of your investment career.”

MichaelSmyrk, STA Journal

“Finally, an easy-to-understand explanation of how technical analysis works! This primer shows investors how to spot trends and patterns in the markets that can help them choose winning stocks. Full of practical advice, this is a must have for both individual and professional investors.”

SusieGharib, Coanchor, PBS Nightly Business Report

TheBest-SellingIntroduction toTechnicalAnalysis: Updated withNewExamples, Techniques,andGuidance!

  • Fully updated with new coverage of bubbles, sector rotation, and rare “black swan” market events

Technical analysis offers powerful, objective tools for picking stocks and making money--and in today’s market environment, that makes it more indispensable than ever. Unfortunately, most technical analysis books confuse investors instead of enlightening them. In this clear, practical, fully updated book, Barron’s Online technical analysis columnist Michael N. Kahn introduces proven technical analysis techniques in simple language that any investor can understand and use.

Kahn explains how technical analysis works and then teaches you how to read charts and translate them into investment decisions. You’ll learn how to use technical analysis to complement your current approach to stock selection, discover what makes a stock look promising, and objectively assess both risk and reward.

This completely revised third edition contains many new examples reflecting today’s transformed market environment. You’ll find detailed new coverage of recognizing bubbles, including real estate (2006), oil (2008), and bonds (2009). Kahn presents powerful new insights into the relationship between technical analysis and market psychology and crucial, up-to-date guidance on sector rotation in rapidly changing markets. He also presents a full chapter on navigating through chaotic, once-in-a-millennium, “black-swan” market events.

  • Why technical analysis works

    Bringing real objectivity to investment decision-making

  • Chart patterns: See the forest and the trees

    Recognizing markets that are changing, need a rest, or are about to take off

  • Understand the central importance of price...

    And what you must know about volume, time, and investor sentiment

  • Down the road: a taste of advanced technical analysis

    Candlesticks, cycles, Elliott waves, and how to debunk those guys on TV

Table of Contents

  1. Title Page
  2. Copyright Page
  3. Contents
  4. Acknowledgments
  5. About the Author
  6. Preface
  7. About This Book
  8. How to Get the Most from This Book
  9. Part I. A Few Things You’ll Need to Know Before You Begin
    1. 1. Required Background
    2. 2. What Is Technical Analysis?
    3. 3. What Is a Chart?
    4. 4. Jargon You Cannot Avoid
  10. Part II. The Core of Chart Analysis
    1. 5. Concepts
    2. 6. What Are Supply and Demand in the Markets?
    3. 7. The Trend Is Your Friend and So Are Trendlines
    4. 8. See the Forest and the Trees
    5. 9. Chart Patterns—When the Market Needs a Rest
    6. 10. Chart Patterns—When the Market Is Changing Its Mind
    7. 11. Chart Patterns—Explosions
    8. 12. Corrections in Perspective
  11. Part III. Technical Analysis in the Real World
    1. 13. What Is There Other Than Price?
    2. 14. Volume
    3. 15. Time
    4. 16. Sentiment
    5. 17. Fundamental Analysis Really Is Technical Analysis
    6. 18. Just What Makes a Stock (Bond, Commodity) Look Good?
    7. 19. Risk Versus Reward—Is This Stock Really Worth It?
    8. 20. This Isn’t Brain Surgery
  12. Part IV. The Actual Process of Investing
    1. 21. OK, Now Do It!
    2. 22. How to Know if You Are Wrong
    3. 23. Sometimes Being Wrong Is Good
    4. 24. When to Sell
    5. 25. Bear Markets
    6. 26. A Word About Your Ego
  13. Part V. Tools and Case Studies
    1. 27. What Do I Really Need to Get Started?
    2. 28. Building Your Technical Toolbox
    3. 29. Final Advice
    4. 30. Case Study—The Perfect World
    5. 31. Case Study—The Real World
    6. 32. Case Study—Bizarro World
    7. 33. How Good Is Your Broker’s Stock?
  14. Part VI. Further on Down the Road
    1. 34. Introduction to Candlesticks
    2. 35. Cycles
    3. 36. Elliott Waves
    4. 37. Technical Terms You May Have Heard
    5. 38. Debunking the TV Analyst
  15. Fun with Jargon
  16. Closing Thoughts
  17. Index