Best Technical analysis books for identifying Stock trends

Technical Analysis is a proven technique that allows you develop an understanding on the movement of a particular stock or index.

It also helps you define the trade keeping in mind the entry, exit and risk perspective.

Getting the right knowledge and a strong foundation in Technical analysis is the stepping stone to successful trading.

But before you start with the infinite amount of information available on the Internet, I would suggest you to get a good book for a structured understanding of Technical analysis. 

Here is my list of recommended best technical analysis books.

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

This is by far one of the best technical analysis books. If you are new to Technical analysis, then this book would be extremely helpful and easy to understand.

It is written very clearly, simply and logically. It uses many graphical examples that illustrate to the reader what to look for.

It covers everything you would want to know about trends, support/resistance, philosophy, Fundamental vs. Technical analysis, major technical pattern recognition, moving averages, oscillators, times cycles, computer trading systems and much more.

The Author also covers different methods of charting, including bar, point and figure and candlestick. This book is a very useful guide and one of the best books on technical analysis. (Click here to read more reviews on Amazon)

2. Technical Analysis of Stock Trends by Robert D. Edwards, John Magee

Having read many books on technical analysis, I would say that this book would also rank among the best technical analysis books.

If you have a basic understanding of how the market works, this will provide you the knowledge on identifying trends, differentiating the minor, secondary, and major trends, and a thorough knowledge of charting.

Illustrating charts from the 1940 – 1990’s, the book makes a strong point to the fact that though many factors have changed over time, the relevance and importance of technical analysis would keep growing with time.

You can also expect to expand your understanding of indicators and oscillators, uses and importance in targeting entry and exit positions.

This book is also a definitive guide on the Dow Theory. I strongly recommend this book to the novice as well as the experienced trader. (Click here to read more reviews on Amazon)

3. Technical Analysis Explained: The Successful Investor’s Guide to Spotting Investment Trends and Turning Points by Martin J. Pring

This is another one of the best technical analysis books for beginners and experienced traders. I consider it my Trading Bible as it is easy to understand and provides a lot of information on the subject.  

This book will provide you with a great introduction to the basic chart patterns you’ll need to know. It has a good collection of almost any interesting technical indicator that is available.

He also showcases information from a huge variety of sources that has anything to do with indicators and oscillators.

If you want to invest in only one book on technical investing, this book by Murphy is a better option for its presentation, editing and use of examples. (Click here to read more reviews on Amazon)

4. The Art and Science of Technical Analysis: Market Structure, Price Action and Trading Strategies 1st Edition by Adam Grimes

The author starts right in with an explanation of having an edge and if this doesn’t exist, everything else is futile.

He also explains about different trades i.e. trend continuation, trend termination, support and resistance holding and support and resistance failing in a very precise manner. The author also has illustrated rather potential trading patterns such as Primary and Secondary patterns.

He then devotes a chapter to tools for confirmation. I especially like his analysis of multiple time frame confirmations. I like the concept of paying attention to the highest time frame.

Overall, this book is a worthwhile read as points are presented in a unique way and it would make you think about trading differently and enable you to see many trading aspects in a different light. (Click here to read more reviews on Amazon)

5. Technical Analysis for Dummies by Barbara Rockefeller

This is the best technical analysis book for those who are somewhat vaguely familiar with technical analysis.

It breaks down all the fine details into simple context and covers all aspects of Technical Analysis from basic to complex topics. It also has a good index section as a guide post for easy look up and put together very well. (Click here to read more reviews on Amazon)

6. Getting Started in Technical Analysis by Jack D. Schwager

I would recommend this as one of the best technical analysis books for beginners. Schwager strikes a good balance between getting the concept across and inundating the beginner with too many details.

He covers, among other things, the validity of technical analysis, chart principles and patterns, trendline construction, trade management, and failed signals with enough humour from time to time.

It is a well written, clear and concise introduction on technical aspect of trading. (Click here to read more reviews on Amazon)

A Note on Technical Analysis

Technical Analysis is a research technique to identify trading opportunities in market based on the actions of market participants. The actions of markets participants can be visualized by means of a stock chart.

Over time, patterns are formed within these charts and each pattern conveys a certain message. The job of a technical analyst is to identify these patterns and develop a point of view.

Like any research technique, technical analysis stands on a bunch of assumptions. As a practitioner of technical analysis, you need to trade the markets keeping these assumptions in perspective.

Some Key points to remember about Technical Analysis

  1. Technical Analysis is a proven method to develop your point of view on the market movement. Also, TA helps in identifying entry and exit points
  2. Technical Analysis visualizes the actions of market participants in the form of stock charts
  3. Patterns are formed within the charts and these patterns help a trader identify trading opportunities
  4. Technical Analysis works best when we keep a few core assumptions in perspective
  5. Technical Analysis is used best to identify short terms trades