My Favourite Books on Technical Analysis.

When I first got into Technical Analysis the only real way to learn was by reading books by those technicians that had started the ball rolling in modern times, and by playing with simple indicators on graph paper. The arrival of dealing room computers and then software accelerated the emergence of technical analysts and, obviously, a huge growth in the number of books on the subject. Nothing actually beats playing with oscillators/tools etc on a PC but reading about how others use those tools comes a close second.

These books are my favourites, covering a broad range of techniques. I encourage you to take a look at these and find some of your own over time that you will, like me, refer back to even after being involved in this type of analysis over many years.

Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications by John Murphy

Regarded by many as the bible of technical analysis and it was one of the first books on the subject that I read. It certainly was a guiding light for the journey I was beginning to try to find a rationale for my trading decisions. Still a ‘go-to’ manual after all these years putting T.A into practice.

Japanese Candlestick Charting Techniques: A Contemporary Guide to the Ancient Investment Techniques of the Far East by Steve Nison

If John’s book is the bible for technical analysis generally then Steve Nison’s book is the equivalent for Candlestick charting. There are been lots of imitations since but few that even come close. In fact, the 2nd best book on Candlestick charting is Steve’s follow up; Beyond Candlesticks: New Japanese Charting Techniques Revealed

 Ichimoku Charts: An Introduction to Ichimoku Kinko Clouds by Nicole Elliott

The Ichimoku Cloud patterns look complex and I’m grateful that modern software makes their creation so easy. But Nicole manages to explain in simple terms how these charts are drawn and how they can be used to analysis the markets and to trade using them. You’ll never leave them off your charts after reading this book.

The Complete Guide to Point-and-Figure Charting by Weber & Zieg

Back in the day, I used to trade Bund futures purely using Point & Figure charts. Had some great success while in the right environment to use them. This was before software made the production of these charts even easier. Simple to look at, there is more to P&F charting that is initially apparent.

DeMark Indicators by Tom DeMark

I had the pleasure of attending a Tom DeMark seminar many years ago. Tom certainly doesn’t lack self-belief and this can be seen by the huge amount of indicators he’s developed over the years, all prefixed with his name, that look at price action in unusual ways. Most of them are now available as ‘add-on’s in most charting packages and many have benefits.

Technical Analysis A Newbies’ Guide: An Everyday Guide to Technical Analysis of the Financial Markets  – Alan Northcott

We all have to start somewhere and as a basic grounding this book, more concise than Murphy’s bible, is an excellent introduction to Technical Analysis.

Fibonacci Analysis by Constance Brown

Fibonacci analysis divides technical analysts but, in my opinion, an understanding of Fibonacci retracements and extensions is essential. Whether you believe in the impact of these numbers in the natural world I don’t doubt the impact on the trading environment. I never use any oscillator or tool that is not based on a Fibonacci number.

Chart Patterns: Bloomberg Market Essentials: by Bruce Kamich

I have to confess that recognition of charting patterns, like Head & Shoulders and wedges etc, is the weakest part of my analysis. I blame it on preferring mathematical tools rather than spatial recognition, but this is the book I return to, reminding me of the value of certain shape formations that portray market sentiment in a visual way.

Trading Price Action Trends: Technical Analysis of Price Charts Bar by Bar for the Serious Trader by Al Brooks

Whatever method you use after reading these books, the key to all trading is to recognise and understand the trend. No matter what you’re trading and on what time horizon, trend identification is essential. Al Brooks in a series of books guides you through his method of determining and trading the trend. No matter what method you eventually choose, this book will help.

Most of you will have noticed that there are only 9 books in this list, not the 10 as promised. The reason for this is a simple one, the last place on the list is being saved for the book that currently sits in Scrivener on my Mac waiting for that final burst of creativity that will result in the book that at the very least will be the 10th best book on Technical Analysis!

Best Wishes

Alan Collins

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