Which Books Should I Read To Learn More About Technical Analysis?

JC Parets
August 29, 2021

This is one I get asked about all the time.

"JC, are there any books you recommend for someone trying to learn more about Technical Analysis?"

The answer is yes. Of course.

The thing is, back in the day when I was studying for my CMT exams, there wasn't a well-defined curriculum like there is today. This was back in 2006. They would just give us a list of books to read and wish us the best of luck!

I really enjoyed that, actually. To this day I still tell people to go through the curriculum like they ask you to, but then go back and read the books too!

Now, if I had to do it all over again today, this is what I would do:

The first 2 books that need to be read (probably twice each) are the Edwards & Magee book: Technical Analysis of Stock Trends and the John Murphy Book: Technical Analysis of Financial Markets.

If you're new to this, I would read the Murphy book first. It's a much easier read. Edwards & Magee was written back in the 1940s so it's tougher to get through.

To be clear, YOU HAVE TO READ THEM BOTH. I would read them each at least twice before moving on.

If you never read another Technical Analysis book again after this, you're still way ahead of 99% of investors throughout history. That's a hell of an advantage, if you ask me.

After that, I would encourage you to brush up on your Candlesticks. Steve Nison will get you done there with his legendary Japanese Candlestick Charting Techniques.

A huge advantage Technicians have over other types of practitioners, is our ability to analyze markets using different time horizons. For this, I recommend Brian Shannon's book: Technical Analysis Using Multiple Timeframes.

By this point, you know how much the Intermarket work that we do helps us on a daily basis. I don't know how we could properly navigate markets without it. Life is not just about the stock market. And even if you only trade stocks, the information you can get from the behavior of commodities, currencies and interest rates only supercharges the analysis you're already doing.

For this, we turn back to John Murphy: Intermarket Analysis - Profiting From Global Market Relationships.

For execution purposes, I found it best to listen to the greatest traders of all time. For that, Jack Schwager gets the job done. His legendary Market Wizards book should be read every couple of years, just as a refresher. I also really enjoyed Hedge Fund Market Wizards, and for quick beach read, The Little Book of Market Wizards is full of some of the best gems from throughout the series.

As Technicians we are analyzing the behavior of the market, and therefore market participants. So it's probably in our best interest to understand how humans think. For that Sapiens by Yuval Noah Harari is a must read.

Thinking in Bets by World Series of Poker Champion Annie Duke is also a must read.

Getting through this set of books won't guarantee that you get rich. BUT, it will go a long way in helping you identify trends, manage risk, and see things most investors are ignoring.

This is a solid list right here.

When you get through those, I would encourage you to check out Martin Pring's Investment Psychology Explained to learn more about historic bubbles and human thinking.

The Little Book of Stock Market Cycles is a great primer before going through the Annual Stock Traders Almanac.

For more advanced concepts that can get you thinking, and can help you build unique models, check out the Elliott Wave Principle by AJ Frost & Robert Prechter, and also check out Technical Analysis for the Trading Professional by Connie Brown.

I've had most of these Authors on my Podcast and write about these concepts every day on Allstarcharts.

But there's nothing as good as going directly to the source.

If you're looking for more reads, get through these first and then ping me. I've got a long list of books for you to hit when you're done with this list above.

But read these first.

JC

 

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