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Published:
October 1, 2019

Technical Analysis For Dummies

Overview

Understand and apply the latest evidence-based trading strategies and techniques in technical analysis

In the newly revised fifth edition of Technical Analysis For Dummies, renowned economist and foreign exchange forecaster Barbara Rockefeller walks you through the basic principles, formulas, and techniques you need to reliably predict the movement of prices based on technical data. This straightforward guide shows you how to put technical knowledge to work to generate profitable trades and make lucrative decisions within your portfolio.

This latest edition offers useful updates on new developments in the discipline, including the integration of artificial intelligence to analyze data, identify patterns, and make predictions. It also covers the incorporation of non-traditional data sources, like social media sentiment and web traffic.

Technical Analysis For Dummies also provides:

  • Step-by-step guidance on spotting market trends and key indicators of future price increases or decreases
  • Behavioral economics insights you can apply to your own trading strategy for immediate improvements in your risk-adjusted returns
  • Discussions of the latest innovations in charting

With comprehensive and cutting-edge explorations of the theories, trends, and science that animate technical analysis, Technical Analysis For Dummies explains the hands-on tools and techniques you’ll need to make informed, independent market decisions that maximize returns and minimize risk.

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About The Author

Barbara Rockefeller, BA, MA, is an international economist and forecaster specializing in foreign exchange. A pioneer in combining technical and fundamental analysis, she publishes daily reports for central banks, fund managers, and traders. She’s also the author of all previous editions of Technical Analysis For Dummies and five other books, including The FX Matrix.

Sample Chapters

technical analysis for dummies

CHEAT SHEET

Need help making trading decisions in securities markets? Technical analysis is a collection of techniques that can help you do that. Discover 16 trading secrets that can help you beat the market, figure out how to read stock charts like a standard bar chart and how to interpret a candlestick chart. Also, learn how to identify the end of a trading chart trend by using the moving average level rule.

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Articles from
the book

Indicators measure stock market sentiment — bullish, bearish, and blah. Indicators are only patterns on a chart or arithmetic calculations whose value depends entirely on how you use them. You use indicators when doing technical analysis for many trading-related decisions, including identifying a trend, knowing when to stay out of a security that isn’t trending, and knowing where to place a stop loss, to name just a few.
Technical trading can take any number of equally valid forms. The trader who waits for multiple time frame confirmations on three indicators can claim just as much technical validity as the guy with the itchy trigger finger who has to trade every hour. The technical trader is the retired rocket scientist the self-taught housewife, the cubicle programmer, and the college student.
Technical analysis can give you an edge in beating the stock market. How, exactly, do you do that? Here are 16 technical analysis secrets to becoming a skilled technical analysis trader: Don’t let the seeming complexity of technical analysis scare you off. The technical analysis workspace is a chart showing the price of a security over time.
Candlestick charting emphasizes the opening and closing prices of a stock security for a given day. Many candlesticks are simple to use and interpret, making it easier for a beginner to figure out bar analysis — and for experienced traders to achieve new insights. Become familiar with candlestick bar notation: Open: The opening price.
Stock and commodity market prices often move in a regular and repetitive manner that looks like a series of ocean waves on the chart. Each wave in a series of waves has a specific height and length, and when those are the same or nearly the same from wave to wave — or waves are consistently proportional to one another — the pattern is called a cycle.
When looking at a price chart, you can call the end of a trend by using the moving average level rule: an uptrend when the moving average today is less than the moving average yesterday, and a downtrend when the moving average today is higher than yesterday. A moving average always lags the price action. In this figure, look at the prices and moving average in the left-hand ellipse.
Need help making trading decisions in securities markets? Technical analysis is a collection of techniques that can help you do that. Discover 16 trading secrets that can help you beat the market, figure out how to read stock charts like a standard bar chart and how to interpret a candlestick chart. Also, learn how to identify the end of a trading chart trend by using the moving average level rule.
The price bar, the basic building block of technical analysis, describes and defines the trading action in a stock security for a given period. Trading action means all the real-money transactions conducted during the period.Know how to read market sentiment in the components of the standard bar. If the bar is tall, it was a battle between buyers (bulls) and sellers (bears).
Volatility is a measure of price variation, either the total movement between low and high over some fixed period of time or a variation away from a central measure, like an average. Both concepts of volatility are valid and useful. The higher the volatility, the higher the risk—and the opportunity.A change in volatility implies a change in the expected price range yet to come.
Ichimoku embodies just about every technical analysis concept—trending, support and resistance, pivots, trend reversal, momentum, stops. This seems like a lot of performance for a few lines on a chart, but it’s all there if you take the time to study it. Ichimoku takes more time than conventional technical analysis, in part because the mindset is less focused on raw supply/demand and fear/greed, and tries to detect value in a more organic way.
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