What are the Best Technical Analysis Books?

Making money in the stock market is no mean feat. Any novice trader knows the perils of finding a method that has stood the test of time. And while no holy grail may exist, technical analysis has a lot to offer.

Technical analysis is a broad category of stock market analysis designed to forecast future share price movements.

It can be as simple as looking at price and volume movements or as complex as fractal analysis.

The topic is so vast that it is hard to know where to begin, which is why we compiled a list of the best technical analysis books to help you accelerate your quest to identify a trading strategy that works well for you.

1. Technical Analysis of the Financial Markets

Among the very best technical analysis books is John Murphy’s classic, called Technical Analysis of the Financial Markets.

John Murphy is one of the most renowned technical analysts. He has appeared on Bloomberg, CNBC, and CNN as well as many other financial TV shows, and is the face of StockCharts.com, a financial information site featuring technical analysis tools.

Technical Analysis of the Financial Markets is the gold standard of technical analysis books. It is perhaps the most comprehensive book of its kind.

Unlike some other books, it is not too wordy yet at the same time it’s a complete resource.

You won’t simply discover technical analysis concepts, you will also discover their applications to futures and stock markets.

From technical tools and indicators to computer technology, the book covers all the essentials needed to objectively analyze stock charts.

You will learn about Japanese Candlesticks, intermarket relationships, and the rotation of stocks among many other topics.

So, whether you are looking to perform stock technical analysis or bitcoin technical analysis, you will have the tools you need to make more informed decisions.

What You Will Learn

Just a sampling of what you will learn in John Murphy’s Technical Analysis of the Financial Markets is shown below:

Dow Theory
  • Stocks as economic indicators
  • Dow Theory applied to futures trading
Chart Construction
  • Candlesticks
  • Arithmetic vs logarithmic scale
  • Daily bar charts
  • Volume
  • Futures open interest
Basic Concepts of Trends
  • Trendlines
  • Support & resistance
  • The Fan principle
  • The Channel line
  • Retracements
  • The importance of the number 3
  • Gann & fibonacci lines
  • Reversal days
  • Price gaps
Major Reversal Patterns
  • Price patterns
  • Head & shoulders reversal patterns
  • Inverse head & shoulders
  • Complex head & shoulders
  • Triple tops and bottoms
  • Double tops and bottoms
  • Saucers and spikes
  • The importance of volume
Continuation Patterns
  • Symmetrical triangles
  • Ascending triangles
  • Descending triangles
  • The broadening formation
  • Flags and pennants
  • Wedge formations
  • Rectangle formations
  • The measured move
  • Confirmation and divergence
Volume & Open Interest
  • Volume & open interest
  • Blowoffs and selling climaxes
  • Open interest in options
  • Put/call ratios
  • Sentiment & technicals
Long Term Charts
  • Long term vs short term charts
  • Continuation charts for futures
  • Importance of longer range perspective
  • The Perpetual ContractTM
Moving Averages
  • Moving average envelopes
  • Bollinger bands
  • Moving averages tied to cycles
  • Fibonacci numbers used as moving averages
  • Band width measures volatility
  • The weekly rule
  • Adaptive moving averages
  • Alternatives to the moving average
Oscillators & Contrary Opinion
  • Measuring momentum
  • Measuring rate of change (ROC)
  • Constructing an oscillator using two moving averages
  • Commodity channel index
  • Relative strength index (RSI)
  • Using 70 and 30 lines to generate signals
  • Stochastics (K%D)
  • Larry Williams %R
  • The importance of trend
  • Moving average convergence/divergence (MACD)
  • MACD histogram
  • Investor sentiment readings
  • Investors intelligence numbers
Point & Figure Charting
  • Point & figure versus the bar chart
  • The horizontal count
  • Price patterns
  • Measuring rate of change (ROC)
  • Commodity channel index
  • Measuring techniques
  • Trading tactics
  • Computerized P&F charting
Japanese Candlesticks
  • Basic candlesticks
  • Candle pattern analysis
  • Filtered candle patterns
Elliott Wave Theory
  • Basic tenets of Elliott Wave Principle
  • Corrective waves
  • The rule of alternation
  • Channeling
  • Wave 4 as a support area
  • Fibonacci ratios & retracements
  • Fibonacci time targets
Time Cycles
  • Dominant cycles
  • Combining cycle lengths
  • Left and right translation
  • How to isolate cycles
  • Seasonal cycles
  • Stock market cycles
  • The January barometer
  • The Presidential cycle
  • Maximum entropy spectral analysis
  • Cycle reading and software
Computers & Trading Systems
  • Welles Wilder’s parabolic and directional movement systems
  • Pros and cons of system trading
Money Management & Trading Tactics
  • Three elements of successful trading
  • Money management
  • Reward to risk ratios
  • Trading tactics
  • Types of trading orders
  • Intraday pivot points
  • Application to stocks
  • Asset allocation
  • Managed accounts and mutual funds
The Link Between Stocks and Futures
  • Intermarket analysis
  • The link between bonds and stocks
  • The link between bonds and commodities
  • The link between commodities and the dollar
  • Stock sectors and industry groups
  • Dollar and large caps
  • Intermarket correlation
  • Neural network software
  • Deflation scenario
Stock Market Indicators
  • Measuring market breadth
  • Comparing market averages
  • The Advance-decline line
  • AD Divergence
  • Daily versus weekly AD lines
  • McClellan oscillator
  • McClellan summation index
  • New highs versus new lows
  • Upside versus downside volume
  • The ARMS Index
  • Equivolume charting
  • Candlepower
Advanced Technical Indicators
  • Technical checklist
  • Chartered market technician (CMT)
  • Market technicians association (MTA)
  • Demand index (DI)
  • Payoff index (HPI)

2. Charting & Technical Analysis

Charting & Technical Analysis by Fred McAllen is one of the very best technical analysis books for analyzing stocks, options, and forex markets, as well as mutual funds.

What distinguishes Charting & Technical Analysis from many other technical analysis books is the in-depth focus on who is buying and who is selling.

Fred McAllen’s book doesn’t simply spotlight charts with 20/20 hindsight perspective about where optimal buy and sell points are but goes further to explain how to identify when tops and bottoms are forming.

The clear focus of the book is empowering traders with knowledge to make more informed trading decisions.

Related: Top 5 ETFs for the Quarter Ahead

Even if you are not an active trader but invest in mutual funds, the book is a valuable.

You will learn about the tricks of financial advisors and salespersons to earn commissions from mutual funds and how advancing your own knowledge can be a money-saver.

If you have been struggling to decipher and analyze stock charts, this book is a virtual must-read.

What You Will Learn

Japanese Candlesticks
  • Support, resistance, and trends
  • Trend lines
  • Chart patterns
  • Reversal patterns
  • Inverted head & shoulders patterns
  • Double tops and bottoms
Saucers and Spikes
  • Continuing patterns
Flags & Pennants
  • Bull flag
  • Bear Flag
  • Pennants
Price Gaps
  • Exhaustion gaps
The Key Reversal Day
  • Percentage retracements
The Interpretation of Volume
  • On-Balance Volume
  • OBV Breakouts
  • Other volume indicators
Short & Long-term Views
  • Top-down market approach
Moving Averages
  • Popular moving averages
  • Stochastics
  • Any time dimension
  • Option put/call ratio
Stop Losses
  • Trailing stop/loss orde

3 – How To Day Trade For A Living

How To Day Trade For a Living is a fascinating book not only in the knowledge it imparts but also because of the compelling narrative that led Andrew Aziz to write it.

Aziz had a PhD in Chemical Engineering from the University of British Columbia but despite his qualifications he was informed during the stock market crash of 2009 that he was no longer needed as an employee.