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<p>Preface xiii</p> <p>Acknowledgments xvii</p> <p><b>1 Introduction to Technical Analysis: Pursuing Profit in the Financial Markets 1</b></p> <p>What Is Technical Analysis? 2</p> <p>Technical versus Fundamental 2</p> <p>Methods 5</p> <p>What to Expect 5</p> <p>Summary 9</p> <p><b>2 The Story of Technical Analysis: From the Japanese Rice Markets to Dow Theory to Automated Trading 11</b></p> <p>The Beginning: Japanese Rice Markets 12</p> <p>Dow Theory 14</p> <p>Charting 17</p> <p>Elliott Wave 18</p> <p>W. D. Gann 20</p> <p>Indicators 20</p> <p>Trend Followers 22</p> <p>Market Technicians Association 23</p> <p>Technical Analysis Today 23</p> <p>Summary 24</p> <p><b>3 The Power of Technical Analysis: Principles of Price Action 27</b></p> <p>Introduction to Price Action Concepts 28</p> <p>Components of Price Action 29</p> <p>Summary 32</p> <p><b>4 The Basics of Technical Analysis: Bars, Candlesticks, Lines, and Point and Figure 33 <br /><br /></b>Bars and Candlesticks 34</p> <p>Line Charts 37</p> <p>Point-and-Figure Charts 38</p> <p>Summary 40</p> <p><b>5 The Heart of Technical Analysis: Uptrends and Downtrends 41</b></p> <p>Introduction to Trend 42</p> <p>Effect of Time Frames on Trend Determination 50</p> <p>Parallel Trend Channels 52</p> <p>Trend Lines 54</p> <p>Summary 55</p> <p><b>6 The Soul of Technical Analysis: Support and Resistance 57</b></p> <p>Introduction to Support and Resistance 58</p> <p>Support Becomes Resistance Becomes Support 60</p> <p>Summary 64</p> <p><b>7 Primary Drawing Tools: Trend Lines, Trend Channels, and Horizontal Support and Resistance 65</b></p> <p>Introduction to Drawing Tools 66</p> <p>Static Support and Resistance 67</p> <p>Dynamic Support and Resistance 72</p> <p>Horizontal Support and Resistance Lines 78</p> <p>Trend Lines 81</p> <p>Parallel Trend Channels 87</p> <p>Summary 89</p> <p><b>8 Chart Patterns: Bar Shapes and Candlestick Formations 91</b></p> <p>Introduction to Chart Patterns 91</p> <p>Continuation Bar Patterns 93</p> <p>Reversal Bar Patterns 102</p> <p>Gaps 106</p> <p>Candlestick Patterns 110</p> <p>Single-Candle Patterns 111</p> <p>Multiple-Candle Patterns 116</p> <p>Summary 118</p> <p><b>9 The World of Moving Averages 119</b></p> <p>Introduction to Moving Averages 119</p> <p>Moving Average Crossovers 123</p> <p>Moving Averages as Support and Resistance 131</p> <p>Summary 134</p> <p><b>10 Key Technical Indicators and Oscillators 135</b></p> <p>Introduction to Indicators and Oscillators 135</p> <p>Key Indicators 139</p> <p>Key Oscillators 148</p> <p>Summary 159</p> <p><b>11 Fibonacci and Elliott Wave 161</b></p> <p>Fibonacci Theory and Methods 161</p> <p>Elliott Wave Theory 170</p> <p>Summary 175</p> <p><b>12 Point-and-Figure Charting 177</b></p> <p>Introduction to Point and Figure 177</p> <p>Point-and-Figure Patterns 181</p> <p>Point-and-Figure Price Targets 188</p> <p>Summary 190</p> <p><b>13 Volume 193</b></p> <p>Introduction to Volume 193</p> <p>On-Balance Volume 196</p> <p>Tick Volume 198</p> <p>Summary 199</p> <p><b>14 Technical Trading Strategies: Practical Applications 201</b></p> <p>Introduction to Technical Trading Strategies 202</p> <p>Moving Average Crossovers 203</p> <p>Breakout Trading 212</p> <p>Trend Trading 224</p> <p>Range Trading 238</p> <p>Price-Oscillator Divergences 244</p> <p>Oscillator Trading 249</p> <p>Fibonacci Trading 254</p> <p>Positive Expectancy 256</p> <p>Summary 258</p> <p><b>15 Risk Control and Money Management 261</b></p> <p>Introduction to Risk Control and</p> <p>Money Management 262</p> <p>Stop-Losses 263</p> <p>Reward:Risk Ratio 266</p> <p>Maximum Allowable Loss 269</p> <p>Multiple Fractional Positions 271</p> <p>Diversification 273</p> <p>Summary 273</p> <p>Index 277</p>

<b>JAMES CHEN, CTA, CMT</b>, is Chief Technical Strategist at FX Solutions, a global leader in foreign exchange trading. An expert on technical analysis and financial market trading, he is also a registered Commodity Trading Advisor (CTA) and a Chartered Market Technician (CMT). Mr. Chen contributes daily and intraday technical analysis to key financial media, is a frequent speaker at trading seminars, and has authored numerous articles on trading strategies and technical analysis in major financial publications. His previous book, <i>Essentials of Foreign Exchange Trading</i> (Wiley), has become an industry-standard guide for currency traders.

<b>Praise for <i>Essentials of Technical Analysis for Financial Markets</i></b> <p>"A serious, workmanlike book, a terrific introduction to technical analysis. Chen offers beginners a clear sample of methods and techniques from which a reader may choose in what to specialize."<br /> —<b>Dr. Alexander Elder</b>, www.SpikeTrade.com, author of <i>Trading for a Living</i></p> <p>"Wiley's <i>Essentials Series</i> promises need-to-have fundamentals for professionals. With James Chen's new book, it now delivers some need-to-have technicals as well."<br /> —<b>Robert Prechter, Jr.</b>, founder/President of Elliott Wave International, Publisher of <i>The Elliott Wave Theorist</i></p> <p>"Trend trading technical analysis is the most important lesson for all investors and Essentials of Technical Analysis for Financial Markets is a great start. If you choose to ignore technical analysis, I guarantee a lifetime of very difficult money-making."<br /> —<b>Michael Covel</b>, author of <i>Trend Following</i> and The <b>Complete TurtleTrader</b></p> <p><b>Think of this as financial market technical analysis 101</b></p> <p>A valuable resource for traders at all skill levels, <i>Essentials of Technical Analysis for Financial Markets</i> equips you with the knowledge you need to analyze any major financial market.</p> <p>This accessible guide to the art and science of technical analysis points you to a wealth of essential methods for identifying potentially high-probability trading opportunities. Focusing on the key information you'll need as a trader or investor, author and leading technical strategist James Chen helps you take on any financial market effectively, manage risk, and target profitability.</p> <p>Take a look inside this indispensable book for world-class guidance on:</p> <ul> <li> <p>How you can pursue profit in the financial markets using technical analysis</p> </li> <li> <p>Principles of price action analysis and trading</p> </li> <li> <p>Charts—including bars, candlesticks, and point and figure</p> </li> <li> <p>The key concept of trend</p> </li> <li> <p>Support and resistance</p> </li> <li> <p>Making the most of financial drawing tools, chart patterns, indicators, and other essential elements of technical analysis</p> </li> <li> <p>Top technical trading strategies, risk control techniques, and money management concepts</p> </li> </ul> <p>Need the ultimate quick-start guide to technical analysis in the financial markets? <i>Essentials of Technical Analysis for Financial Markets</i> explains it all in a way that helps you hit the ground running and take your financial destiny into your own hands.</p> <ul> <li>Discover how technical analysis can dramatically improve your potential for success in trading and investing</li> <li>Understand the essential tools and methods of technical analysis to trade in any major financial market, including stocks, bonds, futures, and forex</li> <li>Explore the specific strategies technical traders use to make trading decisions and stack the odds in their own favor</li> </ul>

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