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Technical analysis is a hot topic for investors right now and offers powerful, objective tools for picking stocks and making money--but most explanations of the subject simply confuse investors instead of enlightening them. In this clear, practical book, Barron's columnist Michael Kahn introduces technical analysis in simple English. Kahn explains exactly how technical analysis works, then teaches you how to read charts and translate what they tell you into real buy and sell decisions. The fully updated Second Edition contains many new examples reflecting major market changes since the First Edition: 9/11, equities bear markets, commodities bull markets, changing interest rates, and more. Step by step, Kahn illuminates the basic theory of technical analysis, demystifies its jargon, outlines its core techniques, and shows how to use it to complement (not replace) the reader's current approach to stock selection. He explains trendlines, chart patterns, and corrections; reveals what makes a stock look promising; and helps to assess potential risk and reward.
Charting the Markets Using Technical Analysis: Required Background
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Acknowledgments xix
About the Author xxi
Preface xxiii
About This Book xxvii
How to Get the Most From This Book xxxiii
Part I: A Few Things You’ll Need to Know Before You Begin 1
Chapter 1: Required Background 3
Chapter 2: What Is Technical Analysis? 13
Chapter 3: What Is a Chart? 19
Chapter 4: Jargon You Cannot Avoid 25
Part II: The Core of Chart Analysis 33
Chapter 5: Concepts 35
Chapter 6: What Are Supply and Demand in the Markets? 41
Chapter 7: The Trend Is Your Friend and So Are Trendlines 47
Chapter 8: See the Forest and the Trees 55
Chapter 9: Chart Patterns–When the Market Needs a Rest 63
Chapter 10: Chart Patterns–When the Market Is Changing Its Mind 73
Chapter 11: Chart Patterns–Explosions 83
Chapter 12: Corrections in Perspective 89
Part III: Technical Analysis in the Real World 95
Chapter 13: What Is There Other Than Price? 97
Chapter 14: Volume 109
Chapter 15: Time 117
Chapter 16: Sentiment 121
Chapter 17: Fundamental Analysis Really Is Technical Analysis 129
Chapter 18: Just What Makes a Stock (Bond, Commodity) Look Good? 135
Chapter 19: Risk Versus Reward–Is This Stock Really Worth It? 147
Chapter 20: This Isn’t Brain Surgery 159
Part IV: The Actual Process of Investing 173
Chapter 21: OK, Now Do It! 175
Chapter 22: How to Know if You Are Wrong 181
Chapter 23: Sometimes Being Wrong Is Good 185
Chapter 24: When to Sell 189
Chapter 25: Bear Markets 201
Chapter 26: A Word About Your Ego 205
Part V: Tools and Case Studies 207
Chapter 27: What Do I Really Need to Get Started? 209
Chapter 28: Building Your Technical Toolbox 215
Chapter 29: Final Advice 221
Chapter 30: Case Study–The Perfect World 223
Chapter 31: Case Study–The Real World 231
Chapter 32: How Good Is Your Broker’s Stock? 245
Part VI: Further On Down the Road 251
Chapter 33: Introduction to Candlesticks 253
Chapter 34: Cycles 263
Chapter 35 Elliott Waves 267
Chapter 36: Technical Terms You May Have Heard 271
Chapter 37: Debunking the TV Analyst 289
Fun with Jargon 293
Closing Thoughts 301
Index 303