Customer Reviews

Essential Technical Analysis: Tools and Techniques to Spot Market Trends

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This 383-page tome covers technical analysis (TA) from many perspectives. For the investor or trader who is new to TA this book will have to be read a few times so that the critical concepts sink in. It is not the most complete book on the subject, nor the simpliest one to understand, but right in the middle. For those readers with a basic knowledge of the subject who are looking for a review of the key concepts and tools, this book provides an excellent refresher with many detailed charting examples to make the teaching points.

Early on, Stevens very briefly covers the basic types and scaling of charts -- bar, line, candlestick, and point-and-figure. For those readers looking for a detailed discussion of charting, I recommend the following books: Steve Nison's Beyond Candlesticks, and Greg Morris's Candlestick Charting Explained, Tom Dorsey's Point and Figure Charting (John Wiley) and Michael Burke's The Three Point Reversal Method (Chartcraft).

The importance of trendlines -- their rationale and construction -- support and resistance, trading ranges, and retracements are thoroughy covered in a 50-page chapter.

Stevens reviews chart patterns in detail in a 70-page chapter that covers ten reversal patterns (double and triple tops and bottoms; "V" tops and bottoms; round tops and bottoms; head-and-shoulders; rectangles; triangles; wedges; flags and different types of price gaps). Each of these topics is explained using chart examples. All the charts in the book are from the TradeStation platform and they are annotated with key points so that the reader can easily get the point.

Another 70-page chapater entitled "Technical Indicators" focuses on the most commonly used indicators and how to use them in determing the market's direction. The indicators covered include: overbought and oversold; 25 pages on moving averages (simple, weighted, and smoothed) with 9, 14 and 20 days; 21 and 50 day and 200 day; 10 weeks, 20 weeks, and 50 weeks; support and resistance with moving averages; moving average cross-overs and envelopes and Bollinger Bands.

Then he covers oscillators. Topics include rate of change, price oscillator, MACD, RSI and stochastics. Stevens then reviews specialty indicators including advance/decline line, McClellan Oscillator, TRIN, sentiment (call/put ratio, CBOE Volatility Index(VIX), CBOE Nasdaq Index (VXN), new highs/new lows, bellwether stocks and sectors.

Next the author reviews confirmations and divergences between prices and indicators to aid in determining the stock's or market's direction. Many charts are shown with oscillator and price examples so that the reader clearly understands the importance and meaning of divergences and confirmations.

Stevens then covers, in an introductory way, topics not normally included in an introductory book. These include seasonality of stock prices, concepts of W.D. Gann (cycles, Gann charts, angles, and price squares), Elliot Wave Analysis (wave structure and characteristics) and technical trading systems (setting up indicator trading systems and testing them).

In the last chapter, Stevens pulls everything together by providing a ten-item TA checklist fo what to look for by using 20 chart examples to drive home key points. At the back of the book, Stevens provides a recommended reading list for further study, seven websites, trading book sources, charting software and data vendors, and a 15-page glossary with 110 key terms clearly explained.

There are 363 books on TA listed on AMAZON. Stevens book offers a solid background on the tools of TA, and how to interpret the charts and related factors. As such it will aid the investor/trader (who seriously studies the subject matter) to make better informed investing/trading decisions.

I was not expecting much from this book. I have read dozens of books on Technical Analysis, and figured it was a "me too" book. However, I would recommend this book to anyone interested in learning more about technical analysis. I have been involved in the market for over 25 years, and this book taught me a thing or two. It does not matter if you think you "know it all" or are just starting to learn, this book will deepen your understanding of stocks and how/why they move.

This book is well written. Each chapter has an introduction and summary at the end of chapter.
Its not a book for someone just starting out trading. The first seventy pages is mainly an introduction to the Technicals.Its an introduction to Chart pattern, Pattern recognition,Trendlines,Moving averages, etc.. followed along with annotation on each charts identifying certain patterns.
Some good information in this book which is sort of condensed from other Technical Analysis books into one book.
Its the stuff you need to know!

I expected a little more than this... This book doesnt contain anything concrete, as if the author deliberately omit everything that is of real importance. Just look at the part about MACD. Way too vague, I get better insight on MACD by googling it out myself. If you seriously looking for a solid book about technical analysis, look else where! There are better ways to throw away money.

This is a very well organized and very well written book. The first 75 pages or so is for the complete newbie. The only thing I don't like about this book is that there is no new information. All the information contained in this book can be found in many other technical analysis books. However, the ideas and information are very well grouped together, and I like the author's writing style.

I unfortunately purchased this book on the strength of the review in the MTA newsletter Technically Speaking. I found absolutely nothing of value, and nothing to indicate to me that the author was qualified to comment on the subject. The quality of the printing leaves much to be desired, almost as though Wiley did this one "on the cheap". If you've bought it, give your copy to someone you hate, and it will at least accomplish something.

--Leigh is the first person to say something new about Mark Weinstein since Jack Schwager in Market Wizards(the first one). On the internet and lexis/nexis there has been no new information about Mark Weinstein--yet he is easily one of best traders ever. But there is only a brief yet informative discussion on Weinstein in the intro of the book.
--The rest of the book discusses technical analysis: trendlines, chart patterns, oscillators, emotion... It seems to me that Leigh is not a "master" of technical analysis but the influence of Weinstein and other traders has made him balanced(there is no pie in the sky bs--no panaceas), he has some insightful points, and he discusses what really works: analogous chart patterns and divergence of price and a price oscillator. Three other points show that Leigh isn't a dumbas#:
1. he mentions that you should continually reassess your analysis throughout the trade. CharlieD said that in his perfect speech in the book by William D. Falloon(Charlie D the story of the Legendary bond trader). It's the only way. Leigh figured that out, too. And Leigh is conscious enough to discuss it--like CharlieD.
2. He discusses oscillators and price divergence....least one forgets Mark Weinsteins point "I am always looking for a market that is losing momentum and then go the other way." But a divergence is only a major part...one still needs a bit more. As Tom Baldwin says "it's involved." Leigh points out that the chart patterns(analogs--similar patterns from the past and see how they worked out), gann, elliott, various oscillators, trendlines, and moving averages help give you a feel.
3- The psychology he talks about is basics. No deep useless theoretical bs--just emotional control of yourself is as important as a divergence of an oscillator and price.
Finally---it's a good book. Leigh is balanced. He's not a wacko. He's obviosly learned something. GOOD WORK LEIGH!
p.s. what leigh said about weinstein: he was looking to start a driving school. weinstein only traded every now and then. he's hardcore..."intense." weinstein would call leigh up just a tad after the market had made a turning point and tell leigh the low or high would stick. weinstein took fat index option positions when he did trade............
other stuff...something cool i figured out is to plot a moving average crossover system(2 averages) or a swing point system(or any simple system)...and look at the equity line of trading that system. make sure the system is always in the market. then plot oscillators of the equity line[rather than use the close or median point of the price bar use the equity line--it works in tradestation: x1= i_openequity; x2=average(x1,5)-average(x1,35); plot1(x2,"equity oscillator");]. the divergences from the equity oscillator and the equity line will then show where "smooth periods" and "extended moves" will occur. This is the ONLY way to trade a mechanical system. you also need to use price oscillators to see where the extended move is going to go. the last thing is praying the Rosary helps with emotional control. it just works.

Everyone who trades stock or invests should read this book. Even if you invest this book will teach you about price fluctuate and how you can take advantage of these fluctuations. The book makes a difficult subject easy.