Technical analysis for beginner traders. Technical analysis for beginners: where to start? Technical analysis course for beginners torrent

Almost every beginner is faced with the problem of which textbook to start learning the basics of Forex trading with? The TradeHow editors looked into this issue and compiled a list of the most interesting bestsellers on technical analysis.

Best textbooks

Trading is a fairly broad and difficult to understand area of ​​knowledge. The initial stage of education is technical analysis, and this is where the path to success begins. The main thing in textbooks on this topic is an accessible, understandable language for the common man, which gradually takes the student deeper into the specifics of trading.

"Beginner's Course" from Reuters

Textbook cover.

The basics of technical analysis, presented by the popular financial agency Reuters, are outlined specifically for beginners. There is no complicated terminology here; any expressions that are incomprehensible to a novice trader are explained in detail.

The textbook contains 3 main sections:

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1. Basics of technical analysis. Its capabilities and scope of application are described.
2. List of basic graphs, methods of their construction and use.
3. Indicators and their signals.

The theory is supplemented with practical tasks. Usually, after each section, a beginner is asked to complete a task, for example, name techniques for a certain market segment, or construct a specific linear graph. As knowledge deepens, tasks become more complex.

The book is based on foreign textbooks written in English.

The book is available in two versions:

1. Printed. It can be purchased in regular bookstores.
2. Electronic. It can be downloaded for free or purchased from an online library.

For reference! The textbook, published in 2001, is riddled with typos, according to users. Traders advise looking for the 3rd edition, the newest version.

"Technical analysis. Plain and simple" by Michael N. Kahn

Design of one of the textbook editions.

The book is presented for Russian readers in translation from A. Kulikov in 2008, the original title of the textbook is “Technical Analysis Plain and Simple”.

The preface to the educational publication describes 3 main goals:

1. Teach the basics of technical analysis.
2. Help you avoid unprofitable trades even at the initial stage.
3. Teach professional language to traders.

The author tried to convey to readers the basics necessary to start meaningful trading. Each term is clearly explained, sometimes providing a detailed explanation of several paragraphs to explain a concept.

The narrative is illustrated with a large number of graphs and diagrams. A distinctive feature of the textbook is the absence of unnecessary things, no deviations from the topic in the form of memories or stories about the author’s mistakes.

The practical part of the textbook is described on the basis of stock trading, but Michael N. Kahn reassures the beginner by asserting that the trading methods presented are acceptable in any market, that is, the universality of technical analysis is once again confirmed.

After the conclusion, the book presents a dictionary of analytical slang.

You can order the textbook in printed form from online stores, the price varies from 700 to 1800 rubles, or you can download it for free.

"Technical analysis. The Complete Course" from J. Schwager

Jack Schwager is a successful trader who is known to many as the author of a series of textbooks to help beginners and experienced traders. The textbook is translated from English; in America the publication is known as “Technical Analysis”.

The textbook, according to traders, gives the most complete and accurate picture of trading. The book is divided into 5 parts.

In general, the textbook examines 4 types of technical analysis:

• computer;
• candle;
• graphic;
• wave.

A large number of examples of unprofitable and profitable trades requires special attention; an explanation for each diagram and graph allows a beginner to better understand the basics of trading.

The cost of a book in a printed version in hardcover reaches 2000 rubles, the electronic edition will cost several times cheaper, 120-220 rubles.

Interesting! The printed book, quite thick, weighing 1.5 kg, has been reprinted more than a dozen times since 1995, and is still popular among newcomers to the trade.

“Technical analysis from A to Z” from Art. Akelisa

Textbook on technical analysis from St. Akelisa.

Stephen Akelis was one of the first, back in the 70s of the last century, to master computer analysis of financial markets. The book with the original title “Technical Analysis from A to Z” describes all the basic concepts and techniques necessary for a novice trader.

The textbook is divided into 2 parts. The first one provides basic terminology with explanations so that even a novice trader can understand important definitions. The second section presents the main models of charts, indicators, and their necessity in a certain situation. Also, each option is given a brief review by the author describing the advantages and disadvantages.

The book, which contains 366 pages and a sea of ​​useful information, can be downloaded for free on some services that specialize in providing information to traders, or purchased at a price of 700 to 1,300 rubles.

Technical analysis - the new science, Thomas Demark

The author of the book is known to many as the eminence grise of trading; back in 1970, he became a leading analyst at the National Investment Service. According to Demark, without basic knowledge, certain trading skills and a sense of proportion, no trader can succeed.

In the book with the original title “The New Science of Technical Analysis”, every trader with different levels of training will find a lot of useful tips, all information is presented thanks to the author’s independent experience. Many analysts believe that Demark managed to show technical analysis from a new, unknown side.

Methods for forecasting market situations and analysis, developed and tested over a quarter of a century by the author himself, have been adopted by many traders who have already achieved good results in trading. Tools such as breakout qualifiers and determination of false and true level interruptions are offered for use. For beginners, this publication should become a reference book; it will help you apply smart tactics from the very beginning.

Any successful trader must know the basics of the theory of technical analysis and be able to competently use it in practice. Without this, there is no talk of any stable income. Therefore, it is worth starting with any book from this list, and then improving your professionalism with the help of other sources.

The Russian edition of the book was prepared with the participation of the Moscow office of the company Reuters

Published with the assistance of Admiral Markets CJSC

Editor A. Stetsenko

Scientific editors A. Ilyin, V. Ionov

Translator A. Polovnikova

Corrector D. Globa

Technical editor THEM. Dolgopolsky

Commissioning Editor A.V. Petrogradskaya

layout designer A.O. Bochenek

© REUTERS Limited, 1999

© Wiley & Sons, 1999. All Rights Reserved. Autorised translation from the English language edition published by John Wiley & Sons, Ltd.

© Publication in Russian, translation, design. Alpina Publishers LLC, 2009

All rights reserved. No part of the electronic version of this book may be reproduced in any form or by any means, including posting on the Internet or corporate networks, for private or public use without the written permission of the copyright owner.

* * *

To the readers

Dear Sirs!

We are pleased to present to you our new project - the publication of a series of textbooks for students of Russian economic universities and aspiring specialists in the banking and financial sector.

This project is a continuation of a large educational program to train qualified personnel for financial institutions and markets in Russia and the CIS countries, which Reuters has been implementing for the past 7 years.

Today, Reuters is the world's leading provider of news and financial information. In 2001, the company celebrated its 150th anniversary.

Reuters is unmatched in the volume, complexity and overall volume of information it supplies to banks, the media and a growing number of other business subscribers.

All of the world's leading banks, brokerage firms and financial institutions use this information for trading, large companies use it to study markets and competitors, and the world's media use it to create printed materials, television and radio programs.

We hope that our manuals will be of interest to you and this will be the beginning of a fruitful cooperation with Reuters.

Sincerely,

Ricardo Torres,

CEO of Reuters AO

Acknowledgments

The publishers and Reuters Limited would like to thank the following for their invaluable support in working on this book:

Collin Nicholson of the Australian Technical Analysis Association for his thorough review of the book and constructive advice;

Dr. Keith A. Rogers of Training and Learning Design, who wrote and designed the first version of this book;

Charles Kaplan, President of Equity Analitycs Ltd, for permission to use terms from his technical analysis dictionary at the end of the book;

Haksoo Kim of Pacific Investment Research, Inc. – for the use of his list of financial markets around the world, given at the end of the book;

Ahsoka Markandu, Tracey Khoo, Ty Liam Hwee and Michael Turlington of Reuters Asia Pte Ltd for their support and advice.

Thanks also to Dow Jones & Co. Inc. for providing the photograph of Charles Dow and the rights to use it.

Preface to the Russian edition

Dear readers!

We present to your attention a book published with the support of the international brokerage company Admiral Markets. The book “Technical Analysis” continues the “Course for Beginners” series from the world famous financial news agency Reuters. Admiral Markets prefers to collaborate with professionals in their field, so we decided to sponsor the publication of all books in this series in Russian. It includes the most popular manuals for training traders and analysts, who in the future will have to apply their professional skills in practice on a daily basis.

The book you are holding in your hands is a systematic guide to technical (graphical) analysis of stock prices. Exchange rates, dynamics of the value of shares, futures and other financial instruments - this is a wide field for the application of modern technical analysis. Close attention is paid to the practical use of the presented techniques and various technical indicators, so the book is rich in real examples, charts and explanations. If you want to learn something new, interesting, relevant about international financial markets and understand the main aspects of skill in interpreting and forecasting the prices of financial assets, while being guided by all the capabilities of technical analysis to make highly profitable investment decisions, then, undoubtedly, this is the best book for you!

The main goal of Admiral Markets is to make trading in financial markets as accessible as possible to everyone! In connection with the merger of the Admiral Markets and UMIS companies, new tools for work have become available - CFDs on shares of Russian companies, the RTS index, access to the stock exchange of the Russian Federation and many others. It has also become possible to open new accounts in the FX+ system, absolutely all transactions for which are registered on the St. Petersburg Stock Exchange. Among other things, you still have the opportunity to trade contracts for differences in the prices of shares of the largest US corporations listed on the New York Stock Exchange (NYSE) and the NASDAQ electronic exchange, as well as trade in any of the 45 currency pairs listed by the company.

The modern, intuitive and multifunctional MetaTrader 4 trading terminal, which you can download for free on our company’s website, will help you successfully master and test in practice the strategies and examples described in the book. A real or demo (training) account can be opened in 5 minutes online from anywhere in the world. There are still no minimum deposit requirements, and you can start trading from $10–50. We accept bank transfers, credit card payments, electronic currencies.

In 2007, a unique bonus program Admiral Club™ was developed, which currently includes thousands of our clients. Every year, the company also organizes international trading competitions with substantial prize funds for everyone. By trading virtual money on demo accounts, you can earn real cash prizes!

Since 2006, Admiral Markets has been a member of the Commission for Regulating Relations of Financial Market Participants (KROUFR), and also has an exchange intermediary license No. 1203, which was issued by the Federal Service for Financial Markets with no expiration date. In addition, since 2009, our company has been licensed in the European Union and is regulated by the EU's common financial legislation, including the latest Markets in Financial Instruments Directive (MiFID). The Financial Supervision Authority of the Republic of Estonia (FSA) has issued a license to our central representative office in the European Union, Admiral Markets AS, to carry out basic types of investment and brokerage activities, including the Forex market, the stock, futures and contract markets. price difference (CFD). The license (No. 4.1–1/46) is valid in all 27 member countries of the European Union.

The company also actively promotes educational courses and practical training programs designed specifically to enhance the knowledge and experience of novice traders. Free seminars and courses are regularly organized in all offices and representative offices of Admiral Markets, the purpose of which is to improve the trading skills of existing players and show all the real possibilities of the Forex market to those who have not encountered it before. For independent study of financial markets, UMIS offers a free distance learning package, which you can connect to in your personal account (http://www.umis.ru).

Information for inquiries and company contacts

Admiral Markets corporate website: http://www.forextrade.ru

Unified help desk telephone numbers:

8-800-555-75-08 (in Russia - free),

8-495-775-75-08 (Moscow).

Address of the central representative office in Russia:

123317, Moscow, Presnenskaya embankment, 10,

block C, tower on the embankment, office. 568.

Before you start...

Who is this book written for?

This book was written to introduce the methods of technical analysis to a variety of groups of readers: traders, back office employees, teachers, managers, private investors seeking to learn how to use technical analysis to implement trading strategies. Anyone starting to study technical analysis can use this book as a foundation. Technical analysis is not an easy discipline, so readers of this book may need to read many more books in the future.

Despite its complexity, technical analysis is no longer just a tool for investment experts. With the advent of publicly available sources of historical market data (such as Reuters) and the ability to access markets via the Internet, technical analysis is becoming relevant for all market participants.

This book will give you an understanding of the basic principles of technical analysis, from the creation of the first charts to the concepts that underpin complex analytical tools. After studying the book, you will learn to use the basic methods of analysis and choose the most appropriate ones in each specific case.

You will also be able to apply your knowledge to study or work in technical analysis at ACI.

What will you find in this book?

This book provides a new approach to gaining basic knowledge of the basic concepts of technical analysis, which continues to grow in importance in modern life. The book is written in accessible language, it contains a minimum of special terms and gives their clear definition.

It is especially valuable that the book provides an opportunity to consolidate the material studied. Each section contains an explanation of basic concepts with practical examples. Exercises and short tests will help you consolidate what you have learned. Each chapter includes a brief but thorough overview and a list of recommended readings on the topic under consideration.

How is this book compiled?

This book includes the following sections:

Before you start...

Current section.

Introduction

Summarizes the history of the development of technical analysis and the Dow theory.

Types of charts

This section describes the basic methods of presenting prices and financial data on charts and lists the application features of each type of chart.

Classic chart analysis

Sell ​​or buy? Graphing can often help you recognize patterns that help you make decisions.

Indicators

Is it possible to predict the market trend? This section describes the different types of indicators.

Waves, numbers and cycles

Are markets truly cyclical and can be described by wave patterns? Are markets governed by mathematical laws or are their development chaotic?

A day in the life of a technical analyst

What does it really look like?

In this book you will constantly encounter highlighted in bold important terms and concepts, e.g. Dow theory. Plus, special icons will remind you what you need to do to get the most out of the material.

This icon indicates a definition of a term that is important to understanding the material.

This icon seems to say: “Stop and think.” You can also write down your thoughts in the box you leave empty.

It is not so easy to get an idea of ​​technical analysis from individual articles on websites or posts on forums; for basic knowledge, a specialized textbook is best suited.

In the book “Technical Analysis. A course for beginners” created by analysts of the Reuters information service contains the basic concepts of the discipline of the same name.

Step by step you will learn why technical analysis is needed and what are the options for carrying it out, master the basic methods and techniques. You will also get acquainted with auxiliary software that can be used in the trader’s terminal.

The book is structured as follows.

1. Introduction - what technical analysis of markets is, the history of its origin, how technical and fundamental analysis differ.

2. Types of charts - which can be used to track existing stock market trends, the advantages and disadvantages of one or another option.

3. Classic chart analysis - a description of the main graphic models through which the trend is studied.

4. Indicators - the most popular Forex indicators available for use in a trader’s trading terminal, their practical application.

5. Waves, numbers and cycles - in this chapter you will become familiar with Gann charts, Fibonacci numbers and Elliott theory.

6. One day in the life of an analyst - the chapter will help systematize all the knowledge gained, an example of using technical analysis in practice.

Fundamental and technical analysis for novice traders are mandatory items in the training program. The whole point is that it is possible to achieve success and make a profit in trading on the stock and foreign exchange markets only if the trading participant understands in which direction and for what reasons the price of the asset is moving, and how events will develop in the future.

Fundamental Analysis establishes a connection between this movement and external influences, such as natural disasters, important political events, and world economic news. This type of analysis is quite simple to understand, but difficult to master and apply, since confident forecasting requires significant experience and consideration of many factors.

In this regard technical analysis , which works only with the price of a trading instrument, is somewhat simpler. Although at first its perception may be difficult, primarily due to the use of many mathematical methods and algorithms. In the future, the use of his methods and technologies will become commonplace and will help you earn stable money in any market.

Books on technical analysis

Technical analysis is a rather difficult topic to study on your own. The models and methods used in it have many nuances that require consideration when considering the market situation and making decisions. Naturally, those who attend offline or online various courses for beginners offered by brokers, specialized companies or resources, and independent traders also undergo training in technical analysis, where they receive specific information in processed form.

This is a good path, however, it is associated with the need to adhere to a strict class schedule and, most often, is paid.

Those who want to undergo training for free and gain a high level of quality knowledge should focus on good books on this topic. There are plenty of these on the Internet. First of all, you should pay attention to such works that have become true classics, such as:

• "Technical Analysis from A to Z" by Stephen Akelis.
• "Technical Analysis" by Michael N. Kahn.
• “Technical Analysis of Futures Markets: Theory and Practice” by John Murphy.

But, unfortunately, not all of them present information as accessible as the beloved series of books from the Dialectika publishing house “..for dummies” does.

For beginners who want to quickly learn trading using technical analysis, there is an excellent option - the Reuters book “Technical Analysis: A Course for Beginners.” It is part of the “Reuters for financiers” series and allows everyone to get acquainted with the beginnings of technical analysis, even those who do not have an initial level of specialized knowledge. You can download the book in pdf format from many websites.

After getting acquainted with it, it will be much easier to perceive any video course and excellent books by specialists such as Alexander Elder, Bill Williams, Thomas Dorsey, Ralph Elliott, etc., aimed at traders who know the beginnings of technical analysis.

The essence of technical analysis and its main provisions

Technical analysis is a special approach to considering processes occurring in the market and predicting its behavior in the future.

Unlike fundamental which takes into account the influence of external factors, it is based solely on the study of behavior past asset prices . For a trader using technical analysis, no other factors other than prices, do not matter.

This approach is based on several axioms formulated by Charles Dow. Currently, this type of analysis uses three main postulates:

• The price takes everything into account. This means that the dynamics of price behavior is determined by a whole variety of data and factors - supply and demand, economic news and political events. Accordingly, the trader does not need any additional information - all forecasts can be made only by analyzing the price.
• There are trends in the market (models, trends). The price does not move chaotically, but has a certain logic of behavior. Accordingly, by recognizing such patterns, a trading participant can with a high degree of probability obtain a reliable forecast.
• History repeats itself. There is a high probability that a model once formed in certain circumstances, with similar initial data, will be implemented again. Finding such a pattern and using it to perform transactions on the market is the purpose of technical analysis.

Pros and cons of TA

This understanding of technical analysis determines its main advantages and disadvantages.

The advantages of the method include:

• Versatility - the same approaches and mathematical apparatus can be used for any markets and assets - stock trading, transactions on the Forex market, working with binary options and futures contracts, etc.
• Scope of evidence — analysis can be carried out on the entire available history of a trading instrument, allowing you to obtain the most viable models that work for a long time.
• Variety of tools — any available methods can be used to process data, from strict mathematical relationships to probabilistic and other tools, for example from the field of statistics, neural network theory, etc.
• Ease of use — after the development of appropriate calculation algorithms, almost every trader can apply them and use the results of their work.
• Accuracy - only actual data is used in the work, broadcast in real time or with low latency.

Significant disadvantages of technical analysis:

• When interpreting the results of the analysis, it is impossible to get rid of subjective factors – each trader makes his own conclusions.
• Over time, the behavior of the masses of bidders undergoes changes, due to which some models are losing relevance and new ones appear.
• As a result of technical analysis, we can only talk about probability of events , but it is impossible to say that such price behavior will certainly take place.

In addition, we must not forget that the increasing complexity of algorithms and analysis methods requires the use of powerful computing systems, and the accuracy and efficiency of information flow are of paramount importance.

Types and tools of technical analysis

A trader who decides to use technical analysis in his work needs to know its main types. Until recently, only:

1. Graphic.
2. Indicator.

The first is based on plotting (searching) a price chart according to certain rules graphic objects:

• Trend lines, reflecting the direction of development of trends.
• Support and resistance levels , on which the special behavior of the instrument is manifested (various methods are used, including Fibonacci, Di-Napoli, Ganna, etc.).
• Price channels (including dynamic ones, for example regression ones) in which price movement occurs.
• Pattern recognition and their confirmation.

Indicative methods use mathematical processing of historical quotes, as a result of which the movement of the price chart is converted to a certain type of curve. They are called indicators. Indicators have characteristic points and areas (zones), and their behavior is more predictable. Based on their behavior, the trader makes a forecast of price behavior.

Currently, thousands of different indicators have been developed, most of which can be classified into the following types:

• Trends, reflecting the emergence and development of trends.
• Oscillators (leading, differentiating), based on the behavior of which one can draw conclusions about a change in the direction of price movement.
• Volume indicators.

Since the analysis of indicators is much simpler, it is easy to create a harmonious trading system based on them.

Currently, with the increase in the power of computer technology used to analyze the market situation, the arsenal of technical analysis methods is expanding. In addition to graphical and indicator ones, a modern trader can use

• Statistical and probabilistic techniques.
• The theory and methods of neural networks, including quite complex ones.

Most methods have ceased to exist in clean form. Many developments (indicators) for various terminals have appeared on the network, which implement, for example, the construction of Fibo levels or regression channels in real time.

In short, technical analysis has become a powerful tool accessible to everyone.

Moreover, since the rules of trading using technical analysis methods are much easier to formalize, it became possible to create mechanical trading systems (MTS). Such “trading robots” can conclude and maintain transactions without human intervention. This will ensure strict compliance with the rules of the strategy, removing the subjective factor.

Their main problem (more precisely, the problem of their developers) remains the accurate identification of price behavior models and the market’s reaction to various sets of factors that change over time.

Technical analysis becomes a tool that will help a beginner navigate a difficult market situation. At the same time, in addition to understanding price behavior, it will make it possible to formalize the rules of trading systems at a more understandable level. And even a relatively simple strategy that predicts development with a high probability, with a minimum of transactions and the level of risk, will bring tangible real profits.

The basis of intraday trading is technical analysis. For beginning traders, the most important thing is to start by mastering it. Through technical analysis, you can learn to understand charts and predict price changes.

What it is

Technical analysis is an approach based on working with various charts, oscillators and information related to price history. Without it, adequate trading, forecasting the value of currencies and understanding the market are impossible.

Includes many techniques, such as technical analysis patterns, display methods (candlesticks, bars, lines, area, Heiken Ashi indicator, etc.), as well as hundreds of popular indicators, drawing tools on top of charts, and much more. Its essence is that the trader finds certain patterns in the available information, and on the basis of this a forecast is born.

Where is technical analysis needed?

It can work almost anywhere: currency, derivatives and stock markets, resources, commodities - in general, any data plotted on a chart. Why is it needed? To predict future price behavior. For example, if you take the euro/dollar currency pair and data on it for a certain period, then based on them you can build a forecast of price behavior in the future. It makes no fundamental difference which trading instruments you work with: futures, options, or even - your assistant.

Start date

Technical analysis for beginners is a headache. You can and should study it endlessly, throughout your entire work related to trading. If you choose this path, then you need to constantly improve.

The work is quite hard and requires diligence. Endless charts, numbers, various additional tools, programs, robots and much more - all this is technical analysis. A course for novice traders should contain at least the basics, namely: Japanese candlesticks, trend lines, support and resistance, the simplest indicators, the concept of a time frame and some other things.

Types of charts

In fact, there are not many of them. The most popular option is Japanese candles. By the way, they appeared even before trading, exchanges and the Internet in general were born. The second option is bars. These are stripes with dashes. They are somewhat similar to candlesticks, but have a different appearance, although they show the opening and closing prices in the same way. There is a simpler option that beginners love, but it is practically useless. This is a regular line. You can’t really see anything on it; it’s almost impossible to track any technical analysis figures; at most you can understand the current direction of the price. Nevertheless, any options have the right to life. There are other more exotic types of charts, but they are unpopular.

Timeframes

Many people will be put off by such a complex foreign name. Nevertheless, without this it is impossible to understand. In your broker's terminal or on a third-party resource, each asset has its own periods for displaying information. Namely:

• 1 minute (M1).
• 5 minutes (M5).
• 15 minutes (M15).
• 1 hour (1H).
• 4 hours (4H).
• 1 day (1D).

Depending on your service provider, these periods may be slightly different, but the above are the most generally accepted and used today. It is advisable to read about the relationship between these periods and understand that the younger ones shape the older ones. So there is no way without this.

Trends

These are the price directions. The price can have only two directions, namely an uptrend and a downtrend. However, there are still lateral movements. This is a kind of uncertainty when the price fluctuates and cannot choose a direction. In addition, trends have pullbacks. This is when the price goes up, for example, but it cannot do this continuously, and a slight decline occurs. This is normal, just like market noise. The golden rule of trading is to trade only according to the direction of the price.

Indicators

This is already more complicated. Technical analysis for beginners is not an easy thing. And when it comes to various graphical indicators, it becomes even more difficult. The following are the most popular indicators:

• Relative Strength Index (RSI).
• Stochastic oscillator.
• MACD.
• Bollinger waves.

Each of them has its own tasks, so it is recommended to study each separately. Try looking for information about these indicators separately or use the help that brokers often offer in their platforms. These tools are often used in trading strategies, but there are countless of them in various combinations and variations.

Parting words

If you decide to seriously engage in currency trading, then read literature and forums, study various and other information. As you already understood, the most important thing is technical analysis for beginners. A book about one thing will not give a beginner the overall picture, so it is best to look for information on forums and in various schools.