Technical Analysis Plain and Simple 3rd

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.

Content

Part I A FEW THINGS YOU’LL NEED TO KNOW

BEFORE YOU BEGIN 

REQUIRED BACKGROUND 

The Past

Technical Market Theory 

The Pillars of Technical Analysis 10

For Fundamentalists

WHAT IS TECHNICAL ANALYSIS? 

Components 

What Is the Market?

WHAT IS A CHART?

A Picture Is Worth a Thousand Words

What Good Is That? 

Tea Leaves? Crystal Ball?

What About Earnings?

JARGON YOU CANNOT AVOID

Bar Chart 

Support and Resistance

Trends

Consolidation, Congestion, Correction

Breakout

Continuation Patterns

Reversal Patterns

Moving Averages

Momentum

Divergence

Part II THE CORE OF CHART ANALYSIS 

CONCEPTS

What Is Really Going on to Form the Charts?

Indecision and Alignment of Needs

Taking the Easy Way Out 

The Herding Effect

Markets Are Scalable 

WHAT ARE SUPPLY AND DEMAND IN THE MARKETS?

What Causes Support and Resistance Levels to Be Penetrated? 

Perceptions Are Reality

THE TREND IS YOUR FRIEND AND SO ARE TRENDLINES

Trendlines

Fan Lines 

SEE THE FOREST AND THE TREES

Less Is More

Multiple Time Frames

Moving Averages

CHART PATTERNS—WHEN THE MARKET NEEDS A REST

Rectangles 

Triangles 

Flags 

Cup with Handle

CHART PATTERNS—WHEN THE MARKET IS CHANGING ITS MIND

Head and Shoulders

Double Tops and Bottoms 

One-Day Reversals

Triangles and Rectangles 

Rounded Tops and Bottoms 

Spikes

CHART PATTERNS—EXPLOSIONS

Breakaway Gaps

Continuation Gaps

Exhaustion Gaps

Other Gaps

CORRECTIONS IN PERSPECTIVE

The Right Way 

The Wrong Way

Part III TECHNICAL ANALYSIS IN THE REAL WORLD 

WHAT IS THERE OTHER THAN PRICE? 

The Big Picture

Does the Market Have Bad Breadth?

Sectors and Industry Groups 

Momentum

Divergence 

VOLUME

Accumulation and Distribution

Cumulative Volume

TIME

Proportion

Cycles 

SENTIMENT

Sentiment Indicators 

Measuring Expectations That Drive Markets 

Subjective

Social Mood 

FUNDAMENTAL ANALYSIS REALLY IS TECHNICAL ANALYSIS

Intermarket Analysis

The Major Markets 

Intramarket Relationships

Prove It!

JUST WHAT MAKES A STOCK (BOND COMMODITY) LOOK GOOD?

Trend and Momentum

Volume

Relative Strength (the Market, Sectors, and Individual Stocks)

Sector Selection

Basing and Breakouts

RISK VERSUS REWARD—IS THIS STOCK REALLY WORTH IT?

How Can Potential Profit Be Measured?

Is That a Good Trade?

Sometimes the Best Trade Is the One You Don’t Make 

THIS ISN’T BRAIN SURGERY

Technician’s License

Let the Market Talk

Theme and Variation

In the Real World, Nothing Is Textbook so Stay Flexible

Part IV THE ACTUAL PROCESS OF INVESTING

OK, NOW DO IT!

The Questions

No Fear 

HOW TO KNOW IF YOU ARE WRONG

Invalidating a Trendline

SOMETIMES BEING WRONG IS GOOD 

Failure That Forewarns

Failure That Cuts Losses

WHEN TO SELL 

The Trend Is at Its End

Price Objective Is Reached

Stop Is Hit

Would You Buy It Right Now, at Its Current Price?

BEAR MARKETS

What Happens in a Bear Market?

A WORD ABOUT YOUR EGO

Remember Why You Are Investing

Part V TOOLS AND CASE STUDIES WHAT DO I REALLY NEED TO GET STARTED?

Real-Time Data 

Charting Software 

Internet

Your Child’s Geometry Tools

BUILDING YOUR TECHNICAL TOOLBOX 219

Technical Tasks

Tools for Each Technical Task

Combination Tools

FINAL ADVICE

CASE STUDY—THE PERFECT WORLD

Are Conditions Favorable for Equity Assets?

What Sectors of the Market Are Good?

What Stocks Within the Good Sectors Are the Best to Buy?

Risk Assessment

Pull the Trigger

CASE STUDY—THE REAL WORLD

CASE STUDY—BIZARRO WORLD

HOW GOOD IS YOUR BROKER’S STOCK?

When Your Broker’s Recommendation Looks

Like Nothing Special 253

Breakout Warning 255

Confirmation Required 

What Makes a Stock Look Good?

Compare It to the Market

Compare Them to Each Other 

Part VI FURTHER ON DOWN THE ROAD

INTRODUCTION TO CANDLESTICKS

Reading Candlesticks

Basic Candlestick Shapes

Reversal Indicators

Continuation Indicators

Dojis

Trading with Candlesticks

CYCLES

What Is a Cycle?

ELLIOTT WAVES

Introduction

TECHNICAL TERMS YOU MAY HAVE HEARD

Open Interest

Bollinger Bands

Relative Strength Index (RSI)

Stochastics 

RSI Versus Stochastics

Fan Lines

Fibonacci Retracements

MACD

Tick 

Trin (Arms Index)

Pivot Points

Point and Figure

DEBUNKING THE TV ANALYST FUN WITH JARGON 

Double Reverse Whirligig

Bear Trap 

Dead-Cat Bounce 

Whipsaw 307

Catapult 308

Saucers 

Candlestick Terms

CLOSING THOUGHTS