5 Great Books for Learning Technical Analysis

Technical analysis can be a powerful tool for investors who understand how it works and what it accomplishes. It differs sharply from fundamental analysis and is absolutely vital for day trading and penny stock investors. A proper understanding from some of the best books on technical analysis will allow you to make better trades.

Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications by John J. Murphy

This book is the absolute essential text on the topic from the best of the best. All day traders from Chicago, to New York to London learn how to read charts and look for patterns from this book. It’s high price separates it from amateur books and really makes serious traders stand out. It is an academic text used in the classroom and remains an essential.

Technical Analysis For Dummies by Barbara Rockefeller

Written in more plain text this title in the For Dummies series is inspired for day traders and chartists at home starting out for the first time. It makes the task easily accessible and puts everything in plain English. It is the most affordable book on the topic and stands to be the best at easing users into some rather complicated terminologies.

Charting and Technical Analysis by Fred McAllen

With 25 years experience in trading and futures, Fred McAllen brings an authoritative and to the point guide that is especially useful for Forex traders, more so than any of the other books on technical analysis. This book focuses on teaching you to know for yourself what is a great investment and how to ignore hype and advertising. The Kindle edition is really cheap.

How Technical Analysis Works by Bruce M. Kamich

Few people understand technical analysis and even fewer understand how it works and why it works. This books is an excellent companion to any of the others to help illustrate to you why you are using charts. The author tackles the usual criticism on technical analysis and plays no games in addressing what it accomplishes and why it makes money.

Japanese Candlestick Charting Techniques by Steve Nison

Japanese Candlestick charts represent a complex and advanced method of charting and are often left to the professionals in futures and hedging. However they are beginning to gain a greater influence in Forex as more and more people adopt them. Although there are other books on the topic this is the only worth the money as it is comprehensive and authoritative.

Investing using fundamental analysis can be achieved with few books and little investment on your part but time and dedication. Technical analysis and learning to be a chartist though is almost always associated with diligent reading and education. You must understand charts and what the signals mean before you can even begin to invest in penny stocks, Forex, futures or options trades.