Technical Analysis

Description

Part I: Introduction
Chapter 1: Introduction to Technical Analysis     1
Chapter 2: The Basic Principle of Technical Analysis–The Trend     7
Chapter 3: History of Technical Analysis     21
Chapter 4: The Technical Analysis Controversy     33
Part II: Markets and Market Indicators
Chapter 5: An Overview of Markets     57
Chapter 6: Dow Theory     77
Chapter 7: Sentiment      91
Chapter 8: Measuring Market Strength     143
Chapter 9: Temporal Patterns and Cycles     177
Chapter 10: Flow of Funds     195
Part III: Trend Analysis
Chapter 11: History and Construction of Charts     219
Chapter 12: Trends–The Basics     249
Chapter 13: Breakouts, Stops, and Retracements     281
Chapter 14: Moving Averages     305
Part IV: Chart Pattern Analysis
Chapter 15: Bar Chart Patterns     333
Chapter 16: Point and Figure Chart Patterns     367
Chapter 17: Short-Term Patterns     393
Part V: Trend Confirmation
Chapter 18: Confirmation     439
Part VI: Other Technical Methods and Rules
Chapter 19: Cycles     481
Chapter 20: Elliott, Fibonacci, and Gann     509
Part VII: Selection
Chapter 21: Selection of Markets and Issues: Trading and Investing     533
Part VIII: System Testing and Management
Chapter 22: System Design and Testing     559
Chapter 23: Money and Portfolio Risk Management     589
Part IX: Appendices
Appendix A: Basic Statistics     611
Appendix B: Types of Orders and Other Trader Terminology     639
Bibliography     643
Index     675
Charles D. Kirkpatrick II, CMT, relative to technical analysis, is or has been:

• President, Kirkpatrick & Company, Inc., Kittery, Maine–a private firm specializing in technical research; editor and publisher of the Market Strategist newsletter.
• Author of several other books on aspects of technical analysis in the trading markets.
• Adjunct professor of finance, Brandeis University International School of Business, Waltham, Massachusetts.
• Director and vice president, Market Technicians Association Educational Foundation, Cambridge, Massachusetts–a charitable foundation dedicated to encouraging and providing educational courses in technical analysis at the college and university level.
• Editor, Journal of Technical Analysis, New York, New York–the official journal of technical analysis research.
• Director, Market Technicians Association, New York, New York–an association of professional technical analysts.

In his life in the stock and options markets, Mr. Kirkpatrick has been a hedge fund manager, investment advisor, advisor to floor and desk traders and portfolio managers, institutional stock broker, options trader, desk and large-block trader, lecturer and speaker on aspects of technical analysis to professional and academic groups, expert legal witness on the stock market, owner of several small businesses, owner of an institutional brokerage firm, and part owner of a CBOE options trading firm. His research has been published in Barron’s and elsewhere. In 1993 and 2001, he won the Charles H. Dow Award for excellence in technical research, and in 2009, he won the MTA award for his contributions to technical analysis. In 2012, he and Julie Dahlquist together won the Mike Epstein Award from the Market Technicians Association Educational Foundation for their dedication to expanding technical analysis courses into college and university graduate schools and for creating this textbook to be used in professional courses on technical analysis. Educated at Phillips Exeter Academy, Harvard College (A.B.), and the Wharton School of the University of Pennsylvania (M.B.A.), he was also a decorated combat officer with the 1st Cavalry Division in Vietnam. He currently resides in Maine with his wife, Ellie, and their various domestic animals.

Julie R. Dahlquist, Ph.D., received her B.B.A. in economics from University of Louisiana at Monroe, her M.A. in theology from St. Mary’s University, and her Ph.D. in economics from Texas A&M University. Dr. Dahlquist has taught at the collegiate level for three decades. Currently, she is an associate professor of professional practice in economics and finance at the M. J. Neeley School of Business at Texas Christian University. Dr. Dahlquist is a frequent presenter at national and international conferences. She is the coauthor (with Richard Bauer) of Technical Market Indicators: Analysis and Performance (John Wiley & Sons) and Technical Analysis of Gaps (Pearson). Her research has appeared in Financial Analysts Journal, Journal of Technical Analysis, Managerial Finance, Applied Economics, Working Money, Financial Practice and Education, Active Trader, and the Journal of Financial Education. She is a recipient of the Charles H. Dow Award (2011) and the Epstein Award (2012). She serves on the Board of the Market Technicians Association Educational Foundation and as editor of the Journal of Technical Analysis. She and her husband, Richard Bauer, have two children, Katherine and Sepp.

Already the field’s most comprehensive, reliable, and objective guidebook, Technical Analysis has been thoroughly updated to reflect the field’s latest advances. Selected by the Market Technicians Association as the official companion to its prestigious Chartered Market Technician (CMT) program, this book systematically explains the theory of technical analysis, presenting academic evidence both for and against it.

Using hundreds of fully updated illustrations and examples, the authors explain the analysis of both markets and individual issues, and present complete investment systems and portfolio management plans. They present authoritative, up-to-date coverage of tested sentiment, momentum indicators, seasonal effects, flow of funds, testing systems, risk mitigation strategies, and many other topics.

Technical Analysis thoroughly covers recent advances in pattern recognition, market analysis, and systems management; new confidence tests; popular methods such as Kagi, Renko, Kase, Ichimoku, Clouds, and DeMark indicators; innovations in exit stops, portfolio selection, and testing; and the implications of behavioral bias; and the recent performance of old formulas and methods. For traders, researchers, and serious investors alike, this is the definitive book on technical analysis.

The definitive guide to technical analysis for professional and individual traders, fully updated to include new techniques and recent market performance 

• Now includes 30% new content from two of the field’s leading instructors: Charles D. Kirkpatrick II and Julie Dahlquist
• Selected by the Market Technicians Association (MTA) as the primary text accompanying its prestigious certification program
• Follows a clear, logical, instructionally sound sequence, from beginner concepts to leading-edge techniques
• Wide-ranging coverage includes market indicators, cycles, strength, chart analysis, trend confirmation, testing, trading systems, and much more
• Systematically explains and applies technical analysis theory and charting with hundreds of real-world examples

Master technical analysis, step-by-step! Already the field’s most comprehensive, reliable, and objective introduction, this guidebook has been thoroughly updated to reflect the field’s latest advances.

Selected by the Market Technicians Association as the official companion to its prestigious Chartered Market Technician (CMT) program, Technical Analysis, Third Edition systematically explains the theory of technical analysis, presenting academic evidence both for and against it. Using hundreds of fully updated illustrations and examples, the authors explain the analysis of both markets and individual issues, and present complete investment systems and portfolio management plans. They present authoritative, up-to-date coverage of tested sentiment, momentum indicators, seasonal effects, flow of funds, testing systems, risk mitigation strategies, and many other topics.

Offering 30% new coverage, Technical Analysis, Third Edition thoroughly addresses recent advances in pattern recognition, market analysis, systems management, and confidence testing; Kagi, Renko, Kase, Ichimoku, Clouds, and DeMark indicators; innovations in exit stops, portfolio selection, and testing; implications of behavioral bias, and the recent performance of old formulas and methods. For traders, researchers, and serious investors alike, this is the definitive guide to profiting from technical analysis.

The definitive guide to technical analysis for professional and individual traders, fully updated to include new techniques and recent market performance 

• Now includes 30% new content from two of the field’s leading instructors: Charles D. Kirkpatrick II and Julie Dahlquist
• Selected by the Market Technicians Association (MTA) as the primary text accompanying its prestigious certification program
• Follows a clear, logical, instructionally sound sequence, from beginner concepts to leading-edge techniques
• Wide-ranging coverage includes market indicators, cycles, strength, chart analysis, trend confirmation, testing, trading systems, and much more
• Systematically explains and applies technical analysis theory and charting with hundreds of real-world examples

The Comprehensive, Objective Guide to the Discipline of Technical Analysis: Fully Updated with New Research, Techniques, Theory, Data, Charts, and Resources

• Suitable for courses leading to the Chartered Market Technician (CMT) designation and Series 86 exam exemption
• Follows a clear, logical sequence from beginner to advanced–with hundreds of up-to-date examples
• Covers indicators, cycles, strength, charts, trend confirmation, testing, trading systems, and much more
• Includes extensive new coverage of sentiment testing, flow-of-funds analysis, and many other topics

Now extensively updated, this is the most complete, objective, and up-to-date tutorial and reference for the entire discipline of technical analysis.

Charles D. Kirkpatrick II and Julie R. Dahlquist thoroughly introduce the field’s principles and history and assess the controversies surrounding its effectiveness. Drawing on the latest research, they systematically discuss markets and market indicators, trend and chart pattern analysis techniques, trend confirmations, selection of potential investments, system testing, and more.

Already the field’s most comprehensive and reliable guidebook, Technical Analysis, Third Edition, has been fully updated to reflect the latest theory, techniques, data, chart examples, and research resources. Selected by the Market Technicians Association as the official companion to its prestigious Chartered Market Technician (CMT) program, this text objectively introduces the entire discipline.

Using updated illustrations, the authors show how to analyze both markets and individual issues and present complete investment systems and portfolio plans. Readers learn how to use momentum indicators, seasonal effects, and many other key techniques. The authors reveal which chart patterns and indicators remain most reliable, show how to test systems, and help you use technical analysis to mitigate risk.

With nearly 30% new coverage, this edition offers significant new coverage of black swans, confirmation patterns, trading system design, market and issue selection, and many new or relatively new indicators, including Kagi, Renko, Kase, Ichimoku, Clouds, and DeMark. Expanded coverage of sentiment testing now reflects VIX and CDS indexes, unconventional indicators, and more. The authors also present extensive new coverage of flow-of-funds analysis, including money velocity, bank liquidity, yield curves/spreads, and Fed funds.

A coherent, updated treatment of the entire field
Current principles, tools, techniques, and applications for both practitioners and students

Does technical analysis really work?
The history of technical analysis and the latest assessments of its value

Identify specific investment opportunities and emerging trends
Uncover promising securities, markets, shifts, and breakouts–and test your insights

Take advantage of the latest techniques and research
Apply recent innovations, as well as new insights into classic methods

Additional information