Trendy Stock Charts Recommended Reading
For each technical analysis method covered by Trendy Stock Charts, I have a favorite book that I use as a reference tool when I have questions or need to refresh my memory. Consider this list your Trendy Stock Charts Recommended Reading list.
Candlestick Charting & Patterns
While there are a few different types of candlestick charting technique books out there, I do really enjoy the book from Steve Nison who is considered the “godfather” of candlestick charting here in the USA. Mr. Nison also proclaims in his book to be the individual that is responsible for brining the Japanese candlestick charting method to Western societies.
Searching online, one can find explanations or definitions of just about every candlestick pattern. Sometimes you will see slight variations of definitions and requirements. Because of this, I like to stick with Japanese candlestick patterns. Pay attention to the nuances of candlestick patterns.
Overall, I think Mr. Nison does an excellent job of providing the background as well as the psychology of several of the most common Japanese candlestick patterns. This would be the book I recommend you purchase first.
Chart Patterns
Thomas Bulkowski’s Encyclopedia of Chart Patterns is a very handy reference tool due to the numerous breakdowns and analysis he provides for each and every chart pattern. His findings are all statistically based.
Patterns from Symmetrical Triangles to Bear Flags all have statistics that can be used to assist in the calculation of price targets for Chart Patterns, as well as the probabilities of achieving those price targets. Several visual representations are also provided for each Chart Pattern.
Elliott Wave Analysis
R.N. Elliott focused on classifying market activity according to a set of wave cycles and ratios of movements. As with waves in the ocean, R.N. Elliott theorized that ebbs and flows of market activity occurs in cycles that repeat and that these repeating cycles can be subdivided into smaller cycles or wave subsets.
Trying to apply Elliott’s wave theories takes a lot of practice and memorization. In addition, there are lots and lots of math calculations involved with this type of analysis. While Elliott Wave Analysis is probably the most difficult type of technical analysis that I use, making it frustrating at times, it can also yield very accurate results when interpreted correctly.
Fibonacci Analysis
This Fibonacci book by Constance Brown, who is also known as the “Queen of Fibonacci”, was not exactly an easy read. I had to read certain sections multiple times to grasp some of the concepts she was trying to teach.
Constance teaches how to use Fibonacci tools for finding support and resistance areas, as well as using them for price projections. She also talks about the mysteries of phi (.618) and Phi (1.618) and how they apply to stock charts. Similar to the Elliott Wave Analysis, Fibonacci Analysis also involves a lot of mathematical calculations.
Point & Figure Charting
Thomas Dorsey does an excellent job explaining the basics of Point & Figure Charting charting and methods; P&F Charting is a method of charting that has been around over 100 years.
Point & Figure Charting involves a charting system of X’s and O’s represented vertically on a stock chart. X’s represent a rising share price, O’s represent a declining share price. Point & Figure Charting (also known as P&F Charting) tries to eliminate the “noise” of intra-day stock activity and rather focuses on the larger moves.
Price & Volume Analysis
I find Price & Volume Analysis is probably my “Go-To” method of technical analysis. I find William J. O’Neil’s book “The Successful Investor” a great learning tool for Price & Volume Analysis.
William J. O’Neil is the founder of Investors Business Daily, a daily investment newspaper. Their website is investors.com and has some excellent screeners and investment tools on it. His book was my foundation for Price & Volume Analysis. He also reviews different types of bases for Chart Patterns and how to trade those basing patterns.
Trendline Analysis
Trendline Analysis is a simple but very powerful tool, especially when complimented with Price & Volume Analysis. But it is also a method that can be used somewhat effectively just by itself.
Stikky Stock Charts is a Trendline book that teaches how to draw trendlines on a chart. It can be completed within one hour, yet it teaches and re-enforces the basic concepts of drawing Trendlines. The best part – the book can be purchased new on Amazon for around $10.
