| Introduction |
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Conventions Used in This Book |
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How This Book Is Organized |
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Part I: Defining Technical Analysis |
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Part II: Preparing Your Mind for Technical Analysis |
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Part III: Observing Market Behavior |
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Part IV: Finding Patterns |
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5 | (1) |
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6 | (1) |
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Part VI: The Part of Tens |
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6 | (1) |
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6 | (1) |
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What You Need to Get Started |
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7 | (1) |
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7 | (2) |
| Part I: Defining Technical Analysis |
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9 | (50) |
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Chapter 1: Opening the Technical Analysis Toolbox |
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11 | (12) |
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What Is Technical Analysis? |
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11 | (3) |
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Trading or investing: The many faces of technical analysis |
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12 | (1) |
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12 | (1) |
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Making the case for managing the trade |
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13 | (1) |
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14 | (3) |
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Focusing on the price is right (and respectable) |
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14 | (2) |
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16 | (1) |
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Looking at the Many Faces of Trendedness |
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17 | (2) |
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17 | (1) |
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Identifying your definition of trendedness |
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18 | (1) |
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Why Technical Analysis Does and Doesn't (Always) Work |
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19 | (1) |
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Viewing the Scope of Technical Analysis |
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20 | (3) |
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20 | (1) |
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21 | (1) |
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21 | (1) |
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21 | (2) |
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Chapter 2: Uncovering the Essence of Market Movement |
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23 | (18) |
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The eBay Model of Supply and Demand |
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24 | (1) |
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24 | (1) |
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24 | (1) |
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Creating demand from scratch |
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25 | (1) |
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Identifying Crowd Behavior |
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25 | (2) |
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The individual versus the crowd |
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26 | (1) |
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Playing games with traders' heads |
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26 | (1) |
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Figuring Out What's Normal: Drawing a Market Profile |
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27 | (3) |
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Explaining the standard deviation |
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28 | (1) |
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29 | (1) |
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Identifying Crowd Extremes and What to Do about Them |
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30 | (5) |
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31 | (1) |
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32 | (1) |
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33 | (2) |
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Big-Picture Crowd Theories |
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35 | (6) |
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The Gann 50 percent retracement |
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35 | (2) |
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Magic numbers: "The secret of the universe" |
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37 | (1) |
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Seeing too many retracements |
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38 | (3) |
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Chapter 3: Going with the Flow: Market Sentiment |
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41 | (18) |
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Defining Market Sentiment |
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42 | (1) |
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42 | (4) |
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Leading the way with spikes |
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43 | (1) |
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Tracking on-balance volume |
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43 | (2) |
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Refining volume indicators |
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45 | (1) |
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Thinking Outside the Chart |
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46 | (6) |
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Sampling information about sentiment |
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47 | (3) |
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Following the earth's axis: Seasonality and calendar effects |
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50 | (2) |
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52 | (1) |
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52 | (3) |
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Searching for historic key reversals |
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52 | (1) |
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53 | (1) |
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Remembering the last price |
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54 | (1) |
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55 | (6) |
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Conditions and contingencies |
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55 | (1) |
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56 | (3) |
| Part II: Preparing Your Mind For Technical Analysis |
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59 | (34) |
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Chapter 4: Using Chart Indicators |
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61 | (16) |
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61 | (4) |
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62 | (1) |
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63 | (2) |
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Examining How Indicators Work |
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65 | (4) |
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Finding relevant time frames |
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65 | (2) |
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Heeding indicator signals |
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67 | (2) |
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Establishing Benchmark Levels |
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69 | (1) |
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70 | (1) |
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Optimizing: The Necessary Evil |
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71 | (6) |
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Constructing a back-test optimization |
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72 | (2) |
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74 | (1) |
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Applying the indicator again |
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75 | (1) |
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Why back-testing is risky |
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76 | (1) |
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Chapter 5: Managing the Trade |
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77 | (16) |
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77 | (4) |
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Answering common questions about trading |
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78 | (1) |
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79 | (1) |
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79 | (2) |
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Taking Money off the Table |
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81 | (1) |
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81 | (1) |
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81 | (1) |
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81 | (1) |
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82 | (1) |
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83 | (6) |
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83 | (1) |
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Sorting out the types of stops |
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84 | (5) |
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89 | (6) |
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90 | (1) |
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90 | (1) |
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Applying stops to adjusted positions |
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91 | (1) |
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More from the frontier of technical knowledge |
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92 | (1) |
| Part III: Observing Market Behavior |
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93 | (58) |
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Chapter 6: Reading Basic Bars: Showing How Security Prices Move |
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95 | (20) |
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96 | (9) |
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Setting the tone: The opening price |
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98 | (2) |
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Summarizing sentiment: The closing price |
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100 | (3) |
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103 | (1) |
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103 | (2) |
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Putting It All Together: Using Bars to Identify Trends |
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105 | (2) |
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105 | (1) |
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106 | (1) |
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But Wait...Nothing Is That Simple |
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107 | (4) |
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Bar components influence the next bar |
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107 | (1) |
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108 | (1) |
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Your eyes can deceive you |
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109 | (1) |
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Bar-reading doesn't always work |
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110 | (1) |
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Zooming Out and Zooming In |
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111 | (4) |
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111 | (1) |
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112 | (1) |
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112 | (3) |
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Chapter 7: Reading Special Bar Combinations: Small Patterns |
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115 | (22) |
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Finding Clues to Trader Sentiment |
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116 | (2) |
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116 | (1) |
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117 | (1) |
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117 | (1) |
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Concerning Common Special Bars |
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118 | (3) |
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118 | (1) |
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119 | (1) |
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Getting outside for the day |
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120 | (1) |
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Finding the close at the open |
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121 | (1) |
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121 | (2) |
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123 | (6) |
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Lacking opportunity: Common gaps |
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125 | (1) |
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Kicking things off: Breakaway gaps |
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126 | (1) |
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Continuing the push: Runaway gaps |
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127 | (1) |
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Calling it quits: Exhaustion gaps |
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127 | (1) |
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Scoring big: Island reversals |
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128 | (1) |
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129 | (1) |
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Using the Trading Range to Deal with Change Effectively |
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130 | (7) |
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Paying attention to a changing range |
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131 | (1) |
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Determining the meaning of a range change |
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131 | (1) |
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Looking at the average trading range |
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132 | (5) |
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Chapter 8: Redrawing the Price Bar: Japanese Candlesticks |
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137 | (14) |
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Candlesticks in the Spotlight |
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137 | (1) |
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138 | (5) |
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138 | (1) |
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139 | (1) |
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140 | (3) |
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143 | (1) |
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Identifying Emotional Extremes |
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144 | (2) |
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Turning to Reversal Patterns |
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146 | (1) |
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Bearish engulfing candlestick |
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146 | (1) |
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146 | (1) |
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147 | (1) |
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147 | (1) |
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148 | (1) |
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Combining Candlesticks with Other Indicators |
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148 | (2) |
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Trading on Candlesticks Alone |
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150 | (1) |
| Part IV: Finding Patterns |
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151 | (54) |
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Chapter 9: Seeing Patterns |
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153 | (14) |
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153 | (3) |
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154 | (1) |
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154 | (1) |
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Coloring inside the lines |
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155 | (1) |
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156 | (3) |
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Ascending and descending triangles |
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156 | (1) |
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157 | (1) |
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Dead-cat bounce-phony reversal |
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158 | (1) |
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Classic Reversal Patterns |
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159 | (5) |
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160 | (1) |
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161 | (1) |
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The ultimate triple top: Head-and-shoulders |
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162 | (2) |
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164 | (3) |
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Taking dictation from the pattern |
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164 | (1) |
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Resuming the trend after retracement |
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165 | (1) |
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166 | (1) |
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Chapter 10: Drawing Trendlines |
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167 | (18) |
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Looking Closely at a Price Chart |
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167 | (3) |
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Forming an Impression of Trends |
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170 | (3) |
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173 | (1) |
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Creating Rule-Based Trendlines |
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174 | (6) |
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Using the support line to enter and exit |
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175 | (2) |
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The other side of the coin: Using resistance to enter and exit |
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177 | (2) |
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Fine-tuning support and resistance |
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179 | (1) |
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Playing games with support and resistance lines |
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180 | (1) |
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Drawing Internal Trendlines |
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180 | (5) |
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181 | (1) |
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How to use the linear regression |
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182 | (3) |
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Chapter 11: Transforming Channels into Forecasts |
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185 | (20) |
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186 | (4) |
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187 | (1) |
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Letting software do the drawing |
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188 | (1) |
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Benefits of straight-line channels |
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188 | (1) |
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Drawbacks of straight-line channels |
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189 | (1) |
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Using Channels to Make Profit and Avoid Loss |
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190 | (1) |
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190 | (6) |
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Distinguishing between false breakouts and the real thing |
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191 | (3) |
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Putting breakouts into context |
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194 | (2) |
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Riding the Regression Range |
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196 | (6) |
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Introducing the standard error |
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197 | (1) |
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Drawing a linear regression channel |
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198 | (1) |
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Confirming hand-drawn channels |
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199 | (1) |
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Special features of the linear regression channel |
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200 | (1) |
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Drawbacks of linear regression channels |
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201 | (1) |
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Pivot Point Support and Resistance Channel |
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202 | (5) |
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Calculating the first zone of support and resistance |
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202 | (1) |
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Calculating the second zone of support and resistance |
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203 | (1) |
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Using pivot support and resistance |
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204 | (1) |
| Part V: Dynamic Analysis |
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205 | (94) |
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Chapter 12: Using Dynamic Lines |
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207 | (22) |
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The Simple Moving Average |
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207 | (10) |
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Starting with the crossover rule |
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208 | (4) |
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Using the moving average level rule |
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212 | (1) |
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213 | (2) |
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Magic moving average numbers |
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215 | (2) |
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Adjusting the Moving Average |
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217 | (2) |
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Weighted and exponential moving averages |
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217 | (1) |
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218 | (1) |
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Choosing a moving average type |
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218 | (1) |
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219 | (4) |
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Using two moving averages |
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220 | (2) |
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Trying the three-way approach |
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222 | (1) |
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Moving Average Convergence-Divergence |
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223 | (6) |
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Calculating convergence and divergence |
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224 | (1) |
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224 | (2) |
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226 | (3) |
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Chapter 13: Measuring Momentum |
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229 | (16) |
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Exploring the Concept of Momentum |
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229 | (2) |
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231 | (3) |
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Calculating rate of change |
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231 | (1) |
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232 | (1) |
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Adding context: Percentage rate of change |
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233 | (1) |
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234 | (1) |
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Pondering the Trickier Aspects of Momentum |
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234 | (4) |
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Detrending the price series |
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235 | (1) |
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235 | (1) |
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236 | (1) |
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Seeing cycles and questioning them |
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236 | (2) |
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238 | (1) |
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238 | (1) |
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Confirming trend indicators |
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239 | (1) |
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Relative Strength Index (RSI) |
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239 | (3) |
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239 | (1) |
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240 | (1) |
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Sorting through RSI ambiguities |
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241 | (1) |
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Using the Rest of the Price Bar-the Stochastic Oscillator |
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242 | (3) |
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243 | (1) |
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244 | (1) |
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Chapter 14: Estimating Volatility |
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245 | (14) |
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Catching a Slippery Concept |
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245 | (4) |
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247 | (1) |
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Low volatility with trending |
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247 | (1) |
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Low volatility without trending |
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248 | (1) |
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High volatility with trending |
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248 | (1) |
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High volatility without trending |
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248 | (1) |
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249 | (2) |
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Profiling the position trader |
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249 | (1) |
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250 | (1) |
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Revisiting the old conventional wisdom |
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251 | (1) |
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251 | (4) |
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Tracking the maximum move |
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251 | (2) |
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Considering the standard deviation |
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253 | (1) |
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Using the average true range indicator |
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254 | (1) |
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Applying Volatility Measures-Bollinger Bands |
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255 | (2) |
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Reviewing Another Volatility Breakout Idea |
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257 | (2) |
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Chapter 15: Ignoring Time: Point-and-Figure Charting |
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259 | (12) |
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Visualizing What's Important |
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259 | (6) |
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260 | (1) |
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Putting each move into a column |
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261 | (1) |
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Picturing the point-and-figure chart |
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261 | (1) |
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262 | (1) |
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263 | (1) |
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Adding the reversal amount to the picture |
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264 | (1) |
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264 | (1) |
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Simple point-and-figure trading |
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265 | (1) |
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265 | (3) |
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265 | (2) |
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Double and triple tops and bottoms |
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267 | (1) |
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Projecting Prices after a Breakout |
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268 | (3) |
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Using vertical price projection |
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268 | (1) |
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Applying horizontal projection |
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269 | (2) |
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Chapter 16: Combining Techniques |
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271 | (16) |
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Standing the Test of Time: Simple Ideas |
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271 | (2) |
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272 | (1) |
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272 | (1) |
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273 | (6) |
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274 | (1) |
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A case study in complexity |
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275 | (4) |
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Expecting a Positive Result |
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279 | (4) |
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Calculating positive expectancy technically |
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279 | (3) |
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Enhancing probability: Entering gradually and exiting at once |
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282 | (1) |
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Incorporating environment and event risk |
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282 | (1) |
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Efficient Entries and Ruthless Exits-Setups |
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283 | (4) |
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284 | (1) |
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284 | (1) |
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Working hard while trading like a pro |
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285 | (1) |
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Reading promotions carefully |
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285 | (2) |
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Chapter 17: Should You Build a Trading System? |
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287 | (12) |
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Defining a Trading System |
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287 | (3) |
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Meeting the strict requirements |
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288 | (1) |
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Finding your place on the spectrum |
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288 | (2) |
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Why Mechanical Systems Fail |
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290 | (3) |
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Fooling around with new ideas |
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290 | (1) |
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Back-testing until you're blue in the face |
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290 | (1) |
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Not knowing your time frame |
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291 | (1) |
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292 | (1) |
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Following Big-Picture Rules |
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293 | (2) |
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Stopping out versus the stop-and-reverse |
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293 | (1) |
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Trade more than one security |
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294 | (1) |
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Don't trade on too little capital |
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295 | (1) |
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295 | (2) |
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Overcoming phony track records |
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296 | (1) |
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297 | (1) |
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Pick the Tool, Not the Security |
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297 | (2) |
| Part VI: The Part of Tens |
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299 | (12) |
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Chapter 18: Ten Secrets of the Top Technical Traders |
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301 | (6) |
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302 | (1) |
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302 | (1) |
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You Make Money Only when You Sell |
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302 | (1) |
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303 | (1) |
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Avoid Euphoria and Despair |
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304 | (1) |
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Making Money Is Better Than Being Right |
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304 | (1) |
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Don't Let a Winning Trade Turn into a Losing Trade |
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305 | (1) |
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305 | (1) |
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306 | (1) |
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306 | (1) |
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Chapter 19: Ten Rules for Working with Indicators |
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307 | (4) |
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307 | (1) |
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Understand Your Indicator |
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307 | (1) |
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Use Support and Resistance |
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308 | (1) |
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Use the Breakout Principle |
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308 | (1) |
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Watch for Convergence/Divergence |
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308 | (1) |
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309 | (1) |
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Back-test Your Indicators Properly |
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309 | (1) |
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Acknowledge that Your Indicator Will Fail |
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310 | (1) |
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There Are No Secret Indicators |
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310 | (1) |
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310 | (1) |
| Appendix: Resources |
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311 | (6) |
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311 | (1) |
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Market Technicians Association (MTA) |
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312 | (1) |
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Software and System-testing |
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312 | (1) |
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312 | (2) |
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314 | (1) |
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Technical Analysis Web Sites |
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315 | (2) |
| Index |
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317 | |
Other versions by this Author