Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications John J. Murphy (1999)
Why Read It? • • •
Offers a clear and concise explanation of the underlying concepts and practical uses of technical analysis in a way that anyone approaching the markets can understand. Provides a guide to understanding and interpreting stock and commodity charts, and stock market movements. Covers all the essentials for learning how to use technical analysis, before tackling the more advanced principles and the linkages between them.
Getting Started Technical Analysis of the Financial Markets is known as the “bible” on TA; it is useful both for beginners and experienced traders, as it describes all the main tools, techniques, and applications for market trading and investment based on charting and historic data. Murphy interprets the role of the technical forecasters in today’s financial climate, and explains how they apply their techniques to the financial markets.
Author John J. Murphy (b. 1952) is founder and President of MurphyMorris, Inc. He was previously a Director of Technical Analysis for Merrill Lynch, and was the Technical Analyst for CNBC-TV for many years.
Context • •
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Shows how TA uses historic trading data, especially prices, volume, and open interest, in order to predict future prices of securities, currencies, and commodities. Examines all the key techniques, such as chart construction, fundamental vs technical analysis, trends, major technical pattern recognition, moving averages, oscillators, times cycles, and computer trading systems. Covers different methods of charting, including bar, point, figure, and candlestick, and how patterns and indicators are used. Considers all that is needed to understand the underlying structure and psychology of the financial markets. Reviews quantitative techniques, such as moving averages, oscillators, and Boillinger Bands.
Impact • • • • •
Examines the basic structure of all major TA techniques, to help choose the best method for specific trading and investment decisions. Details how to apply basic and sophisticated TA methods, emphasizing charting techniques, numerical indicators, and the importance of trend in the financial markets. Many believe that technical analysis of stock charts helps you make better trades and more consistent profits; some prefer fundamental analysis, or a combination of the two. Provides examples and analysis of market moves and quotes from the author’s newsletter. Recognized by the main industry associations, and is required reading for both the Chartered Market Technicians designation and the Diploma of International Technical Analysis.
Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications
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Quotations “The statement ‘market action discounts everything’ forms what is probably the cornerstone of technical analysis.” “The fundamentalist studies the cause of market movement, while the technician studies the effect.” “By following all the markets [the technician] gets an excellent feel for what markets are doing in general, and avoids the ‘tunnel vision’ that can result from following only one group of markets.”
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More Info Books: •
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Edwards, Robert D., John Magee, and W. H. Charles Bassetti. Technical Analysis of Stock Trends. 9th ed. Boca Raton, FL: CRC Press, 2007. Was the first to produce a methodology for interpreting the predictable behavior of investors and markets. Murphy, John J. Study Guide for Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications. New York: New York Institute of Finance, 1999. Study guide that enables the reader to monitor and review their progress. Pring, Martin J. Technical Analysis Explained: The Successful Investor’s Guide to Spotting Investment Trends and Turning Points. New York: McGraw-Hill, 1985. Provides a practical introduction, explaining how to understand, interpret, and predict major market moves.
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