Getting Started in Technical Analysis (Getting Started In.....) (Paperback)

by Jack D. Schwager (Author) "There is a story about a speculator whose desire to be a winner was intensified by each successive failure..." (more)
Key Phrases: price envelope band, measured move objective, trade exit rule, Omega Research, Nov Dec, Trade Entry Reasons (more...)

Editorial Reviews

Product Description
Revered by many, reviled by some, technical analysis is the art and science of deciphering price activity to better understand market behavior and identify trading opportunities. In this accessible guide, Jack Schwager—perhaps the most recognized and respected name in the field—demystifies technical analysis for beginning investors, clearly explaining such basics as trends, trading ranges, chart patterns, stops, entry, and exit and pyramiding approaches. The book's numerous examples and clear, simple explanations provide a solid framework for using technical analysis to make better, more informed investment decisions and as the basis for mechanical trading systems. Along with Schwager's invaluable trading rules and market observations culled from years of real-world trading experience, Getting Started in Technical Analysis offers in-depth coverage of:

• Types of charts—bar, close-only, point-and-figure, candlestick.
• Chart patterns—one-day, continuation, top and bottom formations, the importance of failed signals.
• Trading systems—trend-following, counter-trend, pattern recognition.
• Charting and analysis software—price data issues, time frame/trading style considerations, software research.
• he planned trading approach—trading philosophy, choosing markets, risk control strategies, establishing a trading routine.
  
  From the Publisher
  Technical analysis is the art and science of deciphering chart patterns in order to better analyze and predict prices of a given security. Jack Schwager demystifies technical analysis for investors, introducing them to oscillators, price-and-time charts, on-line charting applications, and much more.
  
  See all Editorial Reviews

Product Details

• Paperback: 352 pages
• Publisher: Wiley; Underlinings edition (February 4, 1999)
• Language: English
• ISBN-10: 0471295426
• ISBN-13: 978-0471295426
• Product Dimensions: 9.2 x 6.1 x 1 inches
• Shipping Weight: 1 pounds (View shipping rates and policies)
• Average Customer Review: 3.7 out of 5 stars See all reviews (30 customer reviews)
• Amazon.com Sales Rank: #106,391 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

37 of 41 people found the following review helpful:

2.0 out of 5 stars Not Necessarily a Beginner's Book., April 20, 2000

By	dsfa "dsfa" (Mira Mesa, CA) - See all my reviews

It was a little difficult to read and took a couple of months to finish. It's not what I expected from a "Getting Started In...." book. I have read other books in this series like "Getting Started In Options Trading" and that book was utterly great. (Highly recommended by the way.) But "Getting Started In Technical Analysis" was a disappointment. For one thing, some of the concepts weren't thoroughly explained. In other aspects, he talks about a figure of a chart that most of the time is at least 2 pages away. You catch yourself flipping around the pages like crazy, and he doesn't do a very good job explaning the charts either. He does do a good job of laying out all the different aspects of technical analysis but I am not sure how helpful they were in actually getting a feel for them. If you decide to buy this book, don't hesitate to return it. I kind of wish I did.

19 of 20 people found the following review helpful:

4.0 out of 5 stars Crucial for beginners, January 18, 2001

By	Peter B. Nelson (Minneapolis, MN USA) - See all my reviews (REAL NAME)

This book is dense with information and cannot be approached lightly. I read "New Market Wizards" in one week but this book took two months. As usual, the effort expended is proportional to the benefit received. In particular, the chapter on "Real Life Chart Analysis" is worth the price, and should be three times longer. There, Mr. Schwager shares two dozen of his own real-life trades, accompanied by the charts and technical analysis he used at the time. The reader is given the opportunity to personally apply the techniques learned from the book to second-guess the author. Only on flip pages are the actual trade results shown, annotated with ruminations on what, if anything, should have been done differently. Examples of both successful and unsuccessful trades are given. Approximately half of the book explains technical analysis, and the other half explains basic trading techniques such as money management, system testing, and the psychological (emotional) pitfalls to avoid. In my humble opinion, no one should trade until understanding the principles presented here. My one criticism is that the book would be easier to follow if the charts were on the same page as their related commentary, but it is only fair to mention that most technical analysis books suffer the same shortcoming. Overall it does a decent job presenting crucially important information for beginners.

27 of 31 people found the following review helpful:

3.0 out of 5 stars Much Too Advanced for Beginners! Good for Intermediates, February 8, 2001

By	Professor Donald Mitchell "Jesus Makes Me a P... (Boston) - See all my reviews (TOP 10 REVIEWER)

Experts can make the mistake of forgetting how little people know when they first get started. That is clearly the case with this book by Mr. Schwager. If you really want to get started with technical analysis for trading, you will need to find something simpler! Then you can graduate to this overview.

I have had the benefit of reading many books on technical analysis and having discussed it with many technicians. From that perspective, I found the book to be a delightful, down-to-earth, nondoctrinaire explanation. But I wouldn't have made it past the first five chapters when I was just getting started with technical analysis.

I graded the book as a one star for beginners and as a five star for intermediates, and that averaged to three stars. Judge accordingly!

Most investors argue strongly in favor of or against price-based analysis. Those who trade a lot usually swear by charts, and those who are long-term investors usually ignore charts. The classic debate is between the "random walkers" who say there ae no patterns in the markets and the chartists. No one has ever proven definitively that charting does or doesn't work for investing. The key problem is nicely stated by the author, " . . . [C]hart analysis is based on general principles, its application depends on individual interpretation."

The book operates on the principle that "[c]hart analysis provides a means of acquiring common sense in trading." The book articulates a variety of reasons why charting can be helpful. I think the best reasons are for helping you explicitly manage the risk you want to take on. This book has a very helpful discussion on that subject.

Before you are done, you will know about different types of charts, trends, trading ranges and their support and resistance levels, chart patterns, oscillators, and how people apply these analytical tools now. The book goes on to show how to apply these tools to trading issues, including what software to use.

My favorite part of the book contained a set of problems to work through using the book. In that section, you can get a feel for charting and your comfort level with it.

The author also explains how trend-following systems can be developed (a fairly conservative use of charting), and provides some useful trading guidelines. These last could have saved many on-line traders a fortune.

So who should learn this material? I would argue that almost no one should. Long-term investors would rarely use it, and can probably rely on fundamental analysis adequately for making entry point decisions. Those who have limited skill in investing should probably be in stock index funds, and do not need this knowledge. Perhaps the best reason to be interested is simply to have a better understanding of the thinking processes that traders use. But that's a human interest application, rather than a financial one.

Some people have compared technical analysis to astrology. After reading the book, you might want to think about that comparison to come to your own conclusions. Certainly, there is no proof offered in this book that these patterns do foretell the future. At least in that element, technical analysis and astrology are similar.

May you always buy low and sell high!