Technical analysis for dummies

Title Page
Copyright Page
Table of Contents
Introduction
	About This Book
	Foolish Assumptions
	Icons Used in This Book
	Where to Go from Here
Part 1 Getting Started with Technical Analysis
	Chapter 1 Introducing Technical Analysis
		Stepping Up to Science
		Unpacking Lingo
		Buy-and-Hold Is Bunk
		Recognizing Who Uses Technical Analysis
		Remembering the Trend Is Your Friend
			Charting your path
			Trendiness versus trendedness
			Picking a time frame
		Viewing the Scope of Technical Analysis
			Charting
			Market timing
			Trend-following
			Technical analysis
			Algorithmic trading
		Why Technical Analysis Works and What Can Go Wrong
			Setting new rules
			Controlling losses to protect gains
		Why Technical Analysis Gets a Bad Rap
			Beating the market is hard, hard work
			The truly random — one-time Shocks
		Finding Order
		What You Need to Get Started
	Chapter 2 Tapping into the Wisdom of the Crowd
		Comprehending the Conventional Supply/Demand Model
		The eBay Model of Supply and Demand
			Securities aren’t socks: The demand effect
			Creating demand from scratch
		Identifying Crowd Behavior
		Defining Normal
			Reverting to the mean
			Trading mean reversion
		Breaking Normal
			Going against the grain: Retracements
			Catching a falling knife: Estimating where and when a retracement will stop
		Accepting When the Crowd Is Extreme
			Avoiding stampedes
			Lesser devilry — playing games with traders’ heads
	Chapter 3 Trade What You See: Market Sentiment
		Where Market Sentiment Comes from and What It’s Good For
		Thinking Outside the Chart: Gauging Sentiment
			Monitoring investors: The bull/bear ratio
			Following the money: Breadth indicators
			Following the betting: The put/call ratio
			Viewing volatility: The VIX
			New and improved sentiment indicators
		Getting the Lowdown on Volume
			Tracking on-balance volume
			Refining volume indicators
			Leading the way with spikes
			Getting a two-for-the price-of-one coupon
		Blindsiding Yourself
			Understanding confirmation bias and anchoring
			Being aware of potential errors
		Thinking Scientifically
			Humility: Conditions and contingencies
			Sample size
	Chapter 4 Gaining Critical Advantage from Indicators
		Overcoming Noise
			Distinguishing between noise and an Event
			Knowing where noise comes from
			Noise from inside the market
		Indicators Give You the Edge
			Classifying indicators
			Understanding what indicators identify
			Choosing your trading style
		Examining How Indicators Work
			Finding relevant time frames
			Heeding indicator signals
		Establishing Benchmark Levels
		Choosing Indicators
		Examining Indicators in Detail
			Constructing a backtest
			The other top metrics
			Fixing the indicator
			Evaluating the risks of backtesting
	Chapter 5 Managing the Trade
		Building Trading Rules
			Finding your risk profile . . . not yet
			Adhering to the no-guru rule
			Creating your trading plan with five easy rules
			Combining indicators with trading rules
			Trading styles
		Knowing How Much Is Enough
		Controlling Losses
		Using the First Line of Defense: Stop-Loss Orders
			Mental stops are hogwash
			Sorting out the types of stops
		Adjusting Positions
			Reducing positions
			Adding to positions
			Scaling in and out 2.0
			Applying stops to adjusted positions
		Managing Your Trades Like a Pro
			Introducing positive expectancy
			Measuring the trade
			Considering your stake
Part 2 Building Indicators from the Ground Up
	Chapter 6 Reading Basic Bars: How to Pounce on Opportunities
		Building Basic Bars
			Reality in a nutshell
			Setting the tone: The opening price
			Summarizing sentiment: The closing price
			Going up: The high
			Getting to the bottom of it: The low
		Putting It All Together: Using Bars to Identify Trends
			Identifying an uptrend
			Pinpointing a downtrend
		Overcoming Murky Bar Waters
			Paying heed to bar series
			Knowing when bar reading doesn’t work
		Framing Your Bars
			Using daily data
			Zooming out to a higher time frame
			Zooming in to a shorter time frame
		Applying Bar Reading in Real Time
	Chapter 7 Special Bars — An Early Warning System
		Finding Clues to Trader Sentiment
			Tick and bar placement
			Trading range
		Identifying Common Special Bars
			Closing on a high note
			Spending the day inside
			Getting outside for the day
			Finding the close at the open
		Decoding Spikes
		Getting Gaps
			Pinpointing a gap
			Using gaps to your advantage
		Filling the Gap
		Using the Trading Range as a Tool
			Paying attention to a changing range
			Determining the meaning of a range change
			Looking at the average trading range
	Chapter 8 Redrawing the Price Bar: Japanese Candlesticks
		Appreciating the Candlestick Advantage
		Dissecting the Anatomy of a Candlestick
			Drawing the real body
			Doing without a real body: The doji
			Catching the shadow
		Sizing Up Emotions
		Identifying Special Emotional Extreme Candlestick Patterns
			Interpreting candlestick patterns
			Turning to reversal patterns
			Continuation patterns
		Combining Candlesticks with Other Indicators
		Trading on Candlesticks Alone
Part 3 Finding Patterns
	Chapter 9 Seeing Patterns
		Introducing Patterns
			Using imagination
			Coloring inside the lines
		Cozying Up to Continuation Patterns
			Ascending and descending triangles
			Dead-cat bounce
		Recognizing Classic Reversal Patterns
			Double bottom
			Double tops
			The ultimate triple top: Head-and-shoulders
		Evaluating the Measured Move
			Taking dictation from the pattern
			Resuming the trend after retracement
			Measuring from the gap
	Chapter 10 Drawing Trendlines
		Looking Closely at a Price Chart
		Following the Rules with Rule-Based Trendlines
			Understanding the seductive zigzag
			Drawing support and resistance lines
			Using the support line to enter and exit
			Noting breakouts and false breakouts
			Using resistance to enter and exit
			Being aware of the 1-2-3 Rule
			Playing games with support and resistance lines
		Drawing Internal Trendlines
			Rules for drawing a linear regression
			Identifying trendedness
			Using the linear regression
	Chapter 11 Transforming Channels into Forecasts
		Diving into Channel-Drawing Basics
			The swing bar problem
			Drawing channels by hand
			Considering the benefits of channels
			Delving into the drawbacks of channels
			Channeling to make gains and avoid losses
		Riding the Regression Range
			Introducing the standard error
			Drawing a linear regression channel
			Confirming hand-drawn channels
			Sizing up the special features of the linear regression channel
			Discovering the drawbacks of linear regression channels
		Dealing with Breakouts
			Distinguishing between false breakouts and the real thing
			Putting breakouts into context
		Examining Pivot Point Support and Resistance Channel
			Calculating the first zone of support and resistance
			Using pivot support and resistance
Part 4 Dynamic Analysis
	Chapter 12 Using Dynamic Lines
		Introducing the Simple Moving Average
			Starting with the crossover rule
			Using the moving average level rule
			Dealing with limitations
			Comparing moving average rules with Donchian rules
			Magic moving average numbers
		Adjusting the Moving Average
			Weighted and exponential moving averages
			Adaptive moving averages
			Wild and woolly moving averages
			Choosing a moving average type
		Using Multiple Moving Averages
			Putting two moving averages into play
			Trying the three-way approach
			Throw them all at the wall and see what sticks
		Delving into Moving Average Convergence and Divergence
			Calculating convergence and divergence
			Creating a decision tool
			Interpreting the MACD
	Chapter 13 Measuring Momentum
		Doing the Math: Calculating Momentum
			Simple momentum
			Using the rate-of-change method
		Pondering the Trickier Aspects of Momentum
			Smoothing price changes
			Filtering momentum
		Applying Momentum
			Discovering divergence
			Confirming trend indicators
		Determining the Relative Strength Index (RSI)
			Calculating the RSI
			Picturing RSI
			Filtering RSI
		Using the Rest of the Price Bar: The Stochastic Oscillator
			Step 1: Putting a number to the fast stochastic %K
			Step 2: Refining %K with %D
			Fiddling with the stochastic oscillator on the chart
	Chapter 14 Estimating Volatility
		Catching a Slippery Concept
			How volatility arises
			Low volatility with trending
			Low volatility without trending
			High volatility with trending
			High volatility without trending
		Measuring Volatility
			Tracking the maximum move
			Considering the standard deviation
			Using the average true range indicator
		Applying Volatility Measures: Bollinger Bands
		Applying Stops with Average True Range Bands
	Chapter 15 Ignoring Time to Create Better Timing
		Focusing on Tick Bars: In the Spirit of Ignoring Time
		Narrowing the Focus to the Move Itself: The Constant Range Bar
			Defining a constant range bar
			Identifying what criteria are needed
		Catching the Big Kahuna: Point-and-Figure Charts
		Visualizing What’s Important
			Putting each move into a column
			Dealing with box size
			Drawing the daily chart
		Applying Patterns
			Support and resistance
			Double and triple tops and bottoms
		Projecting Prices after a Breakout
			Using vertical price projection
			Applying horizontal projection
		Combining P&F Techniques with Other Indicators
	Chapter 16 Combining Techniques
		Adding a New Indicator: Introducing Complexity
			Choosing primary and secondary indicators
			Inserting unexpected validators
			Studying a classic combination
		Sailing into Outer Space
			The Conquistador
			Wave with relative strength
			Enhancing gains with selective timing
		Trading with Limited Expectancy: Semi-System, Setup, and Guerilla Trading
			Semi-system “discretionary” trading
			Solving the squaring problem — setups
			Guerrilla trading
	Chapter 17 Judging Cycles and Waves
		Defining a Cycle and a Wave
			Starting with economics
			Moving on to magic numbers
			Using cycles
		Cycling with Supply and Demand — The Pragmatic Mr. Wyckoff
		Finding Universal Harmony — Hurst’s Magic Numbers
		Looking to the Moon and the Stars
			Examining the lunar cycle
			Adding more celestial bodies
			Including the sun
			Figuring out what’s (maybe) wrong with astronomy cycle theories
		Following the Earth’s Axis: Seasonality and Calendar Effects
			Differentiating between seasonality and calendar effects
			The most well-known calendar effects
			Using seasonality and calendar effects
		Examining Big-Picture Cycle Theories
		Shining a Spotlight on the Magnificent Mr. Gann
			Applying core Gann concepts
			Celebrating Gann’s 50 percent retracement rule
		Embracing the Most Popular Wave Idea — The Elliott Wave
			Looking closer at the Elliott Wave
			Validating retracements
	Chapter 18 The Mind-Blowing Ichimoku
		Taking a Closer Look at Ichimoku
			Defining ichimoku and its characteristics
			Eyeing ichimoku’s differences with conventional technical analysis
			Adapting to new core concepts
			Building a cloud: Starting with moving averages
		Grasping Why Analysts Rely on Ichimoku and Why You Can
		Using Ichimoku in Your Analysis
			Venturing inside the cloud
			Changing time frames
		Trading with Ichimoku
Part 5 The Part of Tens
	Chapter 19 Ten Secrets of the Top Technical Traders
		Appreciate Probability
		Backtesting Matters
		The Trend Is Your Friend
		Entries Count as Much as Exits
		Stops Aren’t Optional
		Treat Trading as a Business
		Eat Your Spinach
		Technical Stuff Never Goes out of Date
		Diversify
		Swallow Hard and Accept Some Math
	Chapter 20 Ten Rules for Working with Indicators
		Don’t Jump the Gun
		Defeat Your Math Gremlins
		Embrace Patterns
		Use Support and Resistance
		Follow the Breakout Principle
		Watch for Convergence and Divergence
		Backtest or Practice-Trade Honestly
		Accept That Your Indicators Will Fail
		Get Over the Idea of Secret Indicators
		Open Your Mind
Appendix: Additional Resources
	The Bare Minimum
		Charting software
		Online resources
	Additional Reading
		My favorites
		Encyclopedias and reference guides
		Classics
		Special areas
		Money management
		Probability and statistics
Index
EULA