The Visual Investor: How to Spot Market Trends (Wiley Trading) [Hardcover]

John J. Murphy (Author)

Book Description

Series: Wiley Trading | Publication Date: February 3, 2009

The Visual Investor, Second Edition breaks down technical analysis into terms that are accessible to even individual investors. Aimed at the typical investor--such as the average CNBC viewer--this book shows investors how to follow the ups and downs of stock prices by visually comparing the charts, without using formulas or having a necessarily advanced understanding of technical analysis math and jargon. Murphy covers all the fundamentals, from chart types and market indicators to sector analysis and global investing, providing examples and easy-to-read charts so that any reader can become a skilled visual investor.

Editorial Reviews

From the Publisher

Now in a book aimed at the huge and growing market of individual investors in stocks, bonds, and mutual funds, John introduces readers to the art and science of visual analysis. Clearly and simply he explains the principles of technical analysis in terms that nonprofessionals can understand and shows individual investors how to track the ups and downs of stock prices by visually comparing charts--instead of relying upon abstruse mathematical formulas and rarefied technical concepts. He also introduces readers to his widely acclaimed Intermarket Analysis--a proven analytical approach based on understanding the impact that all the different markets have on each other and what that means to investors. Features dozens of easy-to-read charts and graphs with step-by-step instructions on how to understand and interpret them. Includes leading software demo disks. --This text refers to an out of print or unavailable edition of this title.

From the Inside Flap

Visual analysis, also known as technical or chart analysis, is one of the best ways to invest in today's markets—and it's not as hard as you might think. This proven approach allows you to follow almost any market, without having to be an expert on any of them, and it can give you an enormous advantage over those who prefer to use some form of economic or fundamental analysis.

With over forty years of market experience and a number of bestselling financial books to his name, John Murphy, one of the world's foremost technical analysts and educators, knows what it takes to make it in this field. Now, with the Second Edition of The Visual Investor—which has been completely updated for current markets—Murphy shares his invaluable insights on this subject with you.

Written in a straightforward and accessible style, this updated guide will introduce you to "visual" investing by explaining a variety of charting techniques that professionals have used for decades, and shows you how specific visual tools can put you in a better position to successfully trade commodities, currencies, bonds, and stocks in both domestic and global financial markets. With the real-world examples and comprehensive charts found here, you'll quickly discover how to:

• Tell the difference between markets that are trending and those that are not

• Locate important breakouts or breakdowns

• Spot significant support and resistance levels

• Implement asset allocation and sector rotation strategies through exchange-traded funds and mutual funds

• Utilize moving averages to keep track of trends

• Incorporate essential price patterns into your investment analysis

Along the way, Murphy takes you through the ins and outs of reading price and volume charts that can help you make sensible investment decisions, and highlights how you can track the ups and downs of financial markets by visually comparing charts—instead of relying upon complex mathematical formulas and confusing technical concepts.

Knowing why a market is moving is interesting, but not crucial to investment success. In order to trade profitably, all that really matters is what the markets are actually doing. Visual analysis is the best way to determine this, and with the Second Edition of The Visual Investor as your guide, you'll learn how to put this effective approach to work for you to enhance the performance of your portfolio.

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Product Details

• Hardcover: 336 pages
• Publisher: Wiley; 2 edition (February 3, 2009)
• Language: English
• ISBN-10: 0470382058
• ISBN-13: 978-0470382059
• Product Dimensions: 9 x 6.1 x 1.4 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 4.1 out of 5 stars  See all reviews (42 customer reviews)
• Amazon Best Sellers Rank: #145,838 in Books (See Top 100 in Books)

Customer Reviews

Most Helpful Customer Reviews

67 of 70 people found the following review helpful:

5.0 out of 5 stars a clear, thorough, well-written presentation of the subject, October 20, 1999

By 

Ruth Henriquez Lyon (Duluth, Minnesota USA) - See all my reviews
(VINE VOICE)    (REAL NAME)   

This review is from: The Visual Investor: How to Spot Market Trends (Hardcover)

This is the best work I've seen so far on technical analysis. I tried a couple of on-line tutorials, as well as a couple of books, and only ended up confused. This author assumes you know nothing and starts you out from scratch. I understand every sentence; it's also well-written enough that it's interesting. I'm now inspired to go on from here, perhaps with Nisan's Candlestick Charting and Beyond Candlesticks. I highly recommend this book.

52 of 54 people found the following review helpful:

3.0 out of 5 stars Good starter book but that's it, February 1, 2004

By 

magellan (Santa Clara, CA) - See all my reviews
(HALL OF FAME REVIEWER)    (COMMUNITY FORUM 04)    (TOP 1000 REVIEWER)   

This review is from: The Visual Investor: How to Spot Market Trends (Hardcover)

This is a good starter book for the beginner, although it will be much too basic for the intermediate or advanced trader. But if you're just starting out, the first 133 pages will give you a basic introduction to the different technical indicators and chart reading. The next half of the book deals with the application of the indicators to mutual funds and other topics. I would just read the first 133 pages, and then go on to one of the more advanced texts now that you have some background, as this book by itself isn't enough to give you a good understanding of the subject. Murphy himself has a more advanced book, and Martin Pring also, and many others. Just be advised this is really just the beginning. The book is also a bit overpriced but I will say it's probably the easiest book I've seen recently for getting your feet wet on the subject.

Perhaps the most important part of the book is Murphy's mentioning that the head and shoulders pattern was investigated by the Federal Reserve and found to be statistically significant, and supposedly now is using the indicator to time its currency interventions. However, the real use of technical analysis is not that the patterns mean anything in and of themselves, its having the experience and judgment to know which pattern applies in a given situation that makes them truly useful, and the fact the traders themselves believe in them, so to some extent they become a self-fulfilling prophecy. So the field of technical analysis is itself a combination of art and science.

And actually, the most important aspect of trading is loss control and sell discipline, and understanding position sizing relative to risk and reward, since understanding the technical indicators is actually fairly straightforward, and many charting packages will do that for you anyway, so you don't even know how to understand how they're derived. And the charting packages will generate buys and sells by whatever indicator you want, but remember, it's knowing when to apply a given indicator that's the hard part. Finally, if you're planning on starting in on trading yourself, make sure you read up on and understand what's known as "money management" thoroughly before you set out--such as proper position sizing (not risking too much money on a given trade) and not selling your losers promply--an almost universal mistake among novice traders--and even pros who should (and do) know better. Good luck and happy trading!

38 of 39 people found the following review helpful:

4.0 out of 5 stars Illustrated Technical Analysis Explained., January 25, 2001

By 

M. Karakus (CAMBRIDGE, MA USA) - See all my reviews
(REAL NAME)   

Amazon Verified Purchase

This review is from: The Visual Investor: How to Spot Market Trends (Hardcover)

John Murphy is able to explain technical analysis with illustrations. Technical analysis should be part of the decision-making process when investing for any fund, stock and/or options. This book is able to take you step by step on how to start and continue into the more complex versions of technical analysis.

Mr. Murphy starts in his first section with the basics: Trends, peaks, through, Fibonacci ratio, etc. These explanations are done with illustrations from actual stocks, not from made-up graphs.

His second section explains indicators: Chapters cover lagging and oscillating moving averages, trading envelopes and bands, measuring overbought and oversold conditions, momentum rate of change (ROC), Relative Strength Index (RSI), stochastic indicators and finally but not least the moving average convergence divergence (MACD) indicator. All the indicators mentioned are explained and demonstrated with real stock graphs.

Mr. Murphy in his final section explains "Linkage": He starts with the Market Linkages chapter where he sums up his previous book on intermarket technical analysis by explaining how the three major asset classes - commodities, bonds and stocks relate to each other. He explains how as commodity prices rise, which result in higher interest rates and lower bond prices, and vice-versa. He also talks about oil and gold prices and how they can affect the stock market, since they are related to companies directly. The interesting couple of pages I found were the indexes to watch while following the linkages of the market trends.

I most appreciated the summaries at the end of every chapter.

Overall the book is very educational and filled with helpful information to make proper decisions when selecting your next investment(s). One disappointment was the supplied CD. Mr. Murphy kept referring to the supplied software within the CD, although the CD only linked to his site. On his site you can find many (not free) software tools to help in your technical analysis.

Good stepping-stone and reference book for traders and investors.

Have fun.