Customer Reviews

Technical Analysis of Stock Trends, 8th Edition

5 star:		(42)
4 star:		(8)
3 star:		(4)
2 star:		(5)
1 star:		(4)

 

 

I read Edwards and McGee, Technical Analysis of Stock Market Trends with great enthusiasm. Here was a book that was originally written in the 1940's that is equally valid to anyone trying to play the stock market in the Twenty First Century. It also gave me insights into the wild times on Wall Street in the Roaring 20's, and taught me how the pros did stock manipulation and organized "bear traps." Understanding Wall Street irrational exuberance in 1928 helps a smart investor understand the irrational exuberance in 1999. I started reading and then using Technical Analysis because I found I couldn't make money on the market just using the fundamental analysis that my accounting professors taught me in business school. I bought stocks based on detailed analysis of the firm's fundamentals and then could not understand why the prices of my "smart" investments immediately dropped like a rock. Technical analysis provides an investor with insights into the market forces (supply and demand) that affect the rise and fall of stock prices and give a rational investor understanding of the psychology of the herd of investors.

Modern web technology available from Clearstation and E-trade take the drudgery out of the technical charting, and make it easy for an amateur investor to become an experienced technical chart reader. Edwards and McGee was the book that helped me develop this skill. I can not praise the authors of this book enough.

The simple indicators that TAST presents can easily be applied to intraday movements, indicators powerful enough that, with an understanding of the story behind the stock and the market environment, are all one needs to trade. Yes, it takes awhile to read this book, as any dense textbook or reference work would. It's worth every minute and penny to study this manual.

Edwards and Magee is considered one of the bibles of technical analysis. While it covers the basics well (head and shoulders tops, etc.), the shear number of not so well known patterns can be overwhelming. I would doubt most people could (or would) finish this book. It's more of a reference book. John Murphy's Technical Analysis of the Futures Markets is a much better choice. Murphy covers trendlines, patterns, stochastics, Elliot Wave, money management and a host of other technical topics. Don't be fooled by its title -- it's quite applicable to stocks.

This is a textbook, and as such, the reader should not expect to be able to breeze through it. I read it over the course of a month, highlighting the most important points with a yellow marker, just as I did my textbooks in college. The effort was well worth it. I now feel that I have a practical basis upon which to evaluate the chart of any stock. I know when to buy, when to sell and when to sit and wait. My investing strategy is 1000% better than it was a year ago, and I owe it all to this book.

The Greek philosopher Heraclitus once observed that it is impossible to step in the same river twice. By that statement he meant, seemingly, that everything is in a state of change. Hence, if Greg Louganis decided to jump off a diving board into the Mississippi River, he would never be able to plunge into the same water molecules more than once. By the time he attempted his second jump, the water which gave way during his first dive would be a long way down the river on its route toward the Gulf of Mexico. Accordingly, Heraclitus's analogy, one could argue, is applicable to the study of securities markets: although companies have traded their stock on exchanges for decades, even centuries, the stock markets themselves are always in flux because participants--investors, as well as the companies themselves--are constantly leaving and entering the game. Robert Edwards' and John Magee's classic TECHNICAL ANALYSIS OF STOCK TRENDS was written fifty years ago, long before such hallowed American companies as Microsoft, Dell, or Cisco Systems were in existence. Although the stock markets are indeed "rivers of change," it is clear that this book remains the standard guide for investors and traders who believe that technical analysis is an effective approach to predicting the future behavior of stocks. Modern readers should be aware, however, that too many of the charts in the book are from obscure, even defunct, companies from the 1940's; the appendix "Updated charts through 1996" is helpful but out of place in the back of the book. These charts, rather, should be placed in the text of the book in order to illustrate the book's key principles. Those interested in applying technical analysis to the future markets should also consider Jack Schwager's recent guide to technical analysis. It would seem impossible, though, that those still interested in trading stocks technically could avoid reading Edwards's and Magee's useful volume, a guide that remains a constant in a world of change.

If you're interested in technical analysis (one of the reviewers wasn't, so he gave the book a bad rating), this is the book to start with.

Sure, it's dense. But it's the BEST technical analysis book out there. Start with this one. Read it each year of your investment career, and you'll be very happy that you did.

(by the way, I own comparable books by bulkowski, Murphy and Schwager, but they don't compare in the level of depth and usefulness of this book)

There are three major, critical tech analysis books.

The first one is John Murphy's.

The second is this one. It is well worth your time.

The last one is Bruce Kamich's "How tech analysis works."

If you read any of these -- or better yet, all 3 -- you WILL have a firm grasp on why charts are important and how charts are properly read.....

Again, these are the only 3 charting books you need as they are the most comprehensive....

This is a book good for beginners, but for intermediate level traders this is definitely not a good choice. This book cover too little on moving average, RSI and other indicators. Also, the graph in this book is almost all hand drawn, make it very hard to read.

Good book, if you really want to learn stock analysis. It gets you thinking for yourself about the movements of stocks. There is no way one can absorb all the information provided within the text. It is a guide and reference for those who want to devote time to stock analysis. I am now more educated on stock trends, but still require the book for periodic refreshers. If you're buying this book for casual reading, find another book. Although very good, this book is very intense and reading it will consume some time. Dedication is required to finish the book, but the potential for success is great, much greater than a lottery ticket.

A lot of timeless insight and wisdom. If you are only looking for the latest and hottest indicator, this book is not for you. It does have a small chapter with definitions of some recent (i.e. less than 30 years old) oscillators, but it mostly discusses area patterns like gaps and head and shoulders (the first edition was written in late forties). On the other hand, it's amazing how timeless the simple (in a Zen sense) market wisdom and insight is. Like "Reminiscenses of a Stock Operator", this book gives you more than a new spreadsheet formula -- it gives you deeper understanding of the nature of the Market.

On the other hand, I think you shouldn't use this book as your first TA course -- you'll probably wish to learn as much as possible as quickly as possible. The book's subtle points will be lost on you, while you'll be angered and frustrated by anachronisms. On the other hand, if you know the TA basics and are looking for refining your understanding, the same old charts and anachronisms (i.e. calling Dow Jones Transportation Index "Rails") can be a welcome way to gain some insight into the history of subject, while enjoying the timeless wisdom of the founding fathers of Technical Analysis.