New Thinking in Technical Analysis

Submitted by Book Library on 2 April, 2010 - 13:50

Sometimes even the most thorough homework on fundamentals fails to pinpoint the best time to buy a stock or take profits. Technical analysis helps market players predict the price behavior of a stock, commodity, or any financial instrument, giving clues about the course your trade may take in the coming weeks and months. When market timing is of the essence in making logical, informed decisions about your trade's future, technical analysis is the tool.

In New Thinking in Technical Analysis: Trading Models From the Masters a dozen top authorities reveal their techniques and strategies for successful trading. This book offers market participants a treasury of tools to improve their investment performance, each from a unique and time-tested perspective. Readers will find immense value in the straightforward, user-friendly, application-rich presentation of market dynamics forecasting in this invaluable guide. Enhanced with over 170 charts and illustrations, New Thinking will become the primary companion of every trader seeking to gain a competitive edge.

New Thinking in Technical Analysis contributors include: Thomas R. DeMark (New Market Timing Techniques), Peter Eliades, Larry McMillan (McMillan on Options), Robin Mesch, John J. Murphy (Technical Analysis of the Financial Markets), Steve Nison (Japanese Candlestick Charting Techniques), Steven Poser, Linda B. Raschke (Street Smarts: High Probability Short Term Trading Strategies), Bernie Schaeffer (The Option Advisor), Courtney D. Smith (Option Strategies), Ken Tower, and Larry Williams (Long-Term Secrets to Short-Term Trading).
Inside each chapter:

  • Descriptions of a particular model, what it measures, and the theory behind it
  • Explanation of how the technique works and how it is validated
  • Helpful illustrations, featuring multiple screen images
  • Discussion of each technique's particular value and usefulness as compared with alternative models
  • Examples of how and in what situation the technique is applicable--and when not to use the model

Positive Review of Book

In this compilation edited by Morgan Stanley Dean Witter technical strategist Rick Bensignor, a dozen financial experts discuss their individual approaches to technical analysis of the stock market. In the first chapter, equities, options and futures trader Linda Bradford Rasche explains swing trading and the underlying principles of technical analysis, thus providing an important primer for understanding the theories in the rest of the book. This is a complex read, since technical analysis involves using various mathematical systems to examine market trends and swings. Those who follow the market closely will find this engrossing, but amateurs could be daunted. We recommend New Thinking in Technical Analysis to serious students of the markets - It's not for the casual browser or those who are not mathematically inclined, but its targeted readers will be quite satisfied.

Negative Review of Book

When you read the title "New Thinking in Technical Analysis", you would assume there would be "new" information presented. NO! There is absolutely nothing new in this book. Candlestick charts and point and figure charts have been around for over a century. You might think he just provides new ways of analyzing this information. NO, not even close!

I don't really understand why the author wrote this book. All the information can be had in traditional technical analysis books. If you have at least read Technical Analysis for Dummies, you will not learn anything by reading this book. Save the $37.80 and put it towards your next commissions.

Author Biography

Bensignor is a senior product specialist at Bloomberg for technical analysis, futures, and commodities applications. Before coming to Bloomberg, he was chief commodities technical strategist for Morgan Stanley. He writes frequently for BLOOMBERG Magazine and is a popular speaker at industry conferences.

Table of Contents

  1. Swing Trading and Underlying Principles of Technical Analysis
    • Influential Thinkers in Technical Analysis
    • General Principles of Price Behavior
    • A Trend Is More Likely to Continue Than Reverse
    • Momentum Precedes Price
    • Trends End in a Climax
    • The Market Alternates between Range Expansion and Range Contraction
    • Creating Swing Charts
    • The Three Types of Trades
    • Retracements
    • Tests
    • Breakouts
    • Trade Management
  2. Forecasting Trends Using Intermarket Analysis
    • Basic Principles
    • Commodities versus Bonds
    • CRB Index versus Rates
    • Oil versus Rates
    • Bonds versus Stocks
    • Intermarket Sector Effect
    • Transports Hurt By Rising Oil
    • Other Sector Influences
    • Sector Rotation and the Economy
    • REITs Turn Up As Technology Turns Down
    • From Biotechs to Drugs
    • Commodities as Economic Indicators
    • Japan's Effect on U.S. Markets
    • The Technical Nature of Intermarket Analysis
    • Inverted Yield Curve Implies Weakening
    • The Evolving Intermarket Model
  3. Applying Moving Averages to Point and Figure Charts
    • Background of Point and Figure Charting
    • Basics of Chart Construction
    • Consolidation Zones
    • Price Objectives
    • Constructing Moving Averages on Point and Figure Charts
    • Recognizing the Long Consolidation Breakout Pattern
    • Identifying Moving Average Reversals
    • Distinguishing between Temporary Pullbacks and Tops
    • Advantages of Point and Figure Charts over Bar Charts
    • When and How to Use the Technique
  4. Spotting Early Reversal Signals Using Candle Charts
    • Constructing Candle Lines
    • Using Individual Candle Lines
    • Doji
    • Shadows
    • Hammers and Shooting Stars
    • Engulfing Patterns
    • Windows
    • Candles and Risk/Reward Considerations
  5. Reading the Language of the Market with Market Profile
    • The Cycle of Equilibrium and Disequilibrium
    • Daily Profile Shapes
    • Normal Days
    • Non-Trend Days
    • Normal Variation of a Normal Day
    • Trend Days
    • Profiles of Equilibrium and Disequilibrium Cycles
    • Non-Price Control and Price Control Phases
    • The 4[times]4 Formation
    • The Four Steps of Market Activity
    • Using Market Profile to Create a Buy/Sell Strategy
    • Minus Development
    • Summary Principles Underlying Market Profile
  6. Using Oscillators to Predict Trade Opportunities
    • Traditional Oscillator Interpretation
    • Importance of Duration Analysis vs. Divergence Analysis
    • Common Overbought and Oversold Oscillators
    • TD Range Expansion Index
    • Construction of TD RE
    • Using TD RE
    • TD DeMarker
    • Construction of TD DeMarker
    • Using TD DeMarker
    • TD DeMarker
    • Construction of TD DeMarker
    • Using TD DeMarker
    • Key Considerations
  7. Using Cycles for Price Projections
    • Basic Steps in Generating Price Projections Using Offset Lines
    • Nominal Price Projections and Terminology
    • Key Terms and Concepts
    • Guidelines for Projecting When Price Extremes Will Occur
    • Applying Market Cycle Projections
    • When New Projections Are Generated
    • Tips on the Success Rate of Projections
    • Cycle Projections Are Either Met or Invalidated over Time
    • Offsets for Weekly, Daily, and Intraday Cycle Projections
    • Preliminary vs. "Confirmed" Projections
    • Adding Cycle Price Projections to One's Toolbox
  8. Trading with the Elliott Wave Theory
    • History of Elliott Wave Theory
    • Description of Elliott Wave Theory
    • Recognizing Wave Characteristics
    • Applying Elliott Wave Theory
    • Multiple Time Frame Analysis
    • From Long-Term Trading to Day Trading: The U.S. Stock Market
    • Making Money When Your Analysis Is Wrong
    • U.S. Bond Market Example
    • Flexibility Is Key
    • Fine-Tuning Your Elliott Wave Theory-Based Trading
  9. Trading Volatility in the Options Market
    • Can You Predict the Market?
    • Volatility Trading Overview
    • Historical Volatility
    • Implied Volatility
    • Implied Volatility as a Predictor of Actual Volatility
    • Spotting Implied Volatility That Is Overvalued or Undervalued
    • Volatility Extremes
    • Vega
    • Trading Volatility
    • Establishing a Delta Neutral Position
    • Determining Whether Volatility Is Cheap, Expensive, or Neither
    • Buying Volatility
    • Selling Volatility
    • Key Benefits of Volatility Trading
  10. Enhancing Technical Analysis by Incorporating Sentiment
    • Proper Application of Contrary Thinking 226
    • Interrelationships of Sentiment Indicators with Technicals
    • Sentiment Measures
    • Qualitative Measures
    • Quantitative Measures
    • Sentiment at Work: A Case Study
    • Stock Market Backdrop
    • Sector Timing
    • Stock Selection
    • Results

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