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Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications SUB UPD EX Edition
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This outstanding reference has already taught thousands of traders the concepts of technical analysis and their application in the futures and stock markets. Covering the latest developments in computer technology, technical tools, and indicators, the second edition features new material on candlestick charting, intermarket relationships, stocks and stock rotation, plus state-of-the-art examples and figures. From how to read charts to understanding indicators and the crucial role technical analysis plays in investing, readers gain a thorough and accessible overview of the field of technical analysis, with a special emphasis on futures markets. Revised and expanded for the demands of today's financial world, this book is essential reading for anyone interested in tracking and analyzing market behavior.
- ISBN-100735200661
- ISBN-13978-0735200661
- EditionSUB UPD EX
- PublisherNew York Institute of Finance
- Publication dateJanuary 4, 1999
- LanguageEnglish
- Dimensions7.35 x 1.61 x 9.63 inches
- Print length576 pages
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- Publisher : New York Institute of Finance; SUB UPD EX edition (January 4, 1999)
- Language : English
- Hardcover : 576 pages
- ISBN-10 : 0735200661
- ISBN-13 : 978-0735200661
- Item Weight : 2.87 pounds
- Dimensions : 7.35 x 1.61 x 9.63 inches
- Best Sellers Rank: #9,221 in Books (See Top 100 in Books)
- #3 in Commodities Trading (Books)
- #9 in Investment Analysis & Strategy
- #11 in Wealth Management (Books)
- Customer Reviews:
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John J. Murphy is a former technical analyst for CNBC and has over forty years of market experience. He is the face of StockCharts.com, which provides financial information to online investors via technical analysis tools. Murphy has appeared on Bloomberg TV, CNN's Moneyline, Nightly Business Report, and Wall $treet Week with Louis Rukeyser. In 1992, he was given the first award for outstanding contribution to global technical analysis by the International Federation of Technical Analysts, and was the recipient of the 2002 Market Technicians Association Annual Award. In addition to the First Edition of The Visual Investor, he is also author of Intermarket Technical Analysis and Intermarket Analysis, all of which are published by Wiley. He also authored Technical Analysis of the Financial Markets. Murphy has a bachelor of arts in economics and a master of business administration from Fordham University.
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Reviewed in the United States on January 12, 2022
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Another really great book to pair TA of the Financial Markets is "Invent Soup" by Brock Bachelder. He showed me what categories I will be focusing on. The next several decades in automation and AI is going to be insane! This Soup Is Real! The Dessert Too!
What I was looking for was something to provide clear, concise descriptions on various technical indicators across all types - trend analysis, price patterns, candles, oscillators, etc. And Murphy not only does this well, but his work provides enough information that I do not see the need for another book on TA on my bookshelf, even though I know that other very good books are available (e.g. Pring). But this one is enough for me. It is well organized and indexed so that I can rapidly look up something while I am setting up trades and get the basic info that I need.
One surprise was how well written the book was and how much I enjoyed reading it. I expected a dry reference book but instead found an excellent and engaging read, perhaps with the exception of the chapter on point and figure which was not up to the rest of the book. (If you are completely new to TA, you might find it less entertaining, but in comparison to the dry tome that I expected when the monster-sized book arrived, Murphy is remarkable in his ability to convert most TA topics and examples into 'normal' English.) He also is not a proponent or zealot about any one indicator type, which I appreciate. He does a good job of describing each within the context of its value without trying to convert anyone to any specific indicator. As I do not believe in magic bullets in trading, I appreciate his straightforward approach.
Let me also note what this book is NOT so that you do not buy it for the wrong reasons:
a) As you should gather from the above, this is not a trading system. Murphy will not tell you which indicators to use most or in which combinations to produce the best results. He will provide insight into many indicators and classes of indicators but he is NOT trying to convince you to use any specific indicator in any specific way. So he doesn't try to convince you of WHAT to use, just helps you understand WHEN, WHY and HOW each indicator type is used by various traders.
b) Also, this is NOT intended to be the complete, in depth statement on any of the topics covered. For example, his section on Candlestick formations is simple, clear and includes many examples, but it is undoubtedly not the same as picking up Nison's works on Candlesticks. Similarly, you can find many books dedicated to Elliot Waves, Fibonaccis and other topics. Murphy provides the basics, but do not expect as thorough an explanation or justification as a dedicated book would provide. Then again, expect a dedicated book to try and convince you why its particular system or method is so much better than any other, something that Murphey will not try to do to you!
c) Finally, this book is NOT intended to convert people who do not accept TA into believers. Frankly, it is much easier to get most people to accept that `fundamental analysis' affects a stock's value and price, but it is harder for most to understand and accept that simply analyzing the stock's price and related indicators can predict future moves. Murphy's opening chapters include some simple basic background on TA, but verbal explanations have limited value in convincing a pure `fundamentalist' that properly used technical analysis works. The only way to break down this barrier, IMO, is simply to learn and use various indicators for a while to begin seeing how predictive they can be. Murphy does not try to convert - he simply provides a learning reference. From there, anyone using TA needs to practice to become proficient.
So, in summary, I highly recommend buying this book for what it is intended to be - a reference book on technical analysis. It does this job excellently.
While the book basically focuses on trend-following techniques -- about which I have many reservations -- the book also covers numerous contrarian tools as a way to time an entry into the predominant trend during a shorter-term pause/pull-back/consolidation period. The emphasis is as much on charting techniques as on strictly numerical indicators, and Murphy is probably at his best in explaining how best to use this or that item in the toolbox to ones advantage and what its limitations are and what can go wrong. The overall tone is very solid and realistic. I especially liked his clear exposition of the important differences between the futures/commodities markets (where many of these techniques originated) and the stock market.
I'm marking it down one tick for a couple of reasons. First, I would have liked more quantitative depth; qualitative discussions such as this can only take one so far toward actual applications. Second, there's virtually nothing here on options and their effects on the markets; the same could be said about computerized trading systems (some coverage but not nearly enough). Third, there were a couple of glaring ommisions: in talking about saucer bottoms he doesn't mention the well-known tea-cup-with-handle formation even though the handle shows clearly on the chart he uses to illustrate it; when talking about simple moving averages he neglects to mention the important "box-car" effect of big changes moving out the tail end of the averaging period; and while Wilder's RSI gets plenty of good coverage the recipe for it he gives is a bit misleading in that it only allows one to construct the first value, not any subsequent values. And, fourth, I think he gives period analysis and Elliott wave theory more attention than is deserved and never mentions the application of Fourier techniques in this arena; I could say much the same with regard to ideas based on Fibonacci numbers (perhaps I'm yet unconvinced in these areas). So the book could have been better in some places.
For their historical significance I especially liked all the charts from the 1997-9 time period which show things in the glory days just before the top of the market bubble in 2000: Intel at $100 ($20 today), Bristol Meyers at $95 ($20-25 today), crude oil at $16, etc. [I was trading Micron (pg 127) actively during the period when it spiked to $60 ($12-13 recently) and remember those days well]. So the many charts used to illustrate various things were a bonus to me, though they remind me there was no mention of market manias and how to correctly read extremes and their subsequent breakdowns. Perhaps it would have been asking too much for a closing chapter prognosticating the future as he saw it then, though it would have been interesting had he thought to write such a chapter. This is still a very good book for what it is. 4+ stars.
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