Essentials of Technical Analysis for Financial Markets Chen of ESSENTIALS Technical Analysis for...
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TechnicalAnalysis forFinancialMarketsDiscover how technical analysis can dramatically improve your potential for success in trading and investing
Understand the essential tools and methods of technical analysis to trade in any major financial market, including stocks, bonds, futures, and forex
Explore the specific strategies technical traders use to make trading decisions and stack the odds in their own favor
Investments & Securities
$39.95 USA /$47.95 CAN
ChenESSENTIALS of Technical A
nalysis for Financial Markets
PMS 2766C PMS 123C GLOSSY
Praise for ESSENTIALS OF TECHNICAL ANALYSIS FOR FINANCIAL MARKETSA serious, workmanlike book, a terrific introduction to technical analysis. Chen offers begin-ners a clear sample of methods and techniques from which a reader may choose in what to specialize. Dr. Alexander Elder, www.SpikeTrade.com, author of Trading for a Living
Wileys Essentials Series promises need-to-have fundamentals for professionals. With James Chens new book, it now delivers some need-to-have technicals as well.
Robert Prechter, Jr., founder/President of Elliott Wave International, Publisher of The Elliott Wave Theorist
Trend trading technical analysis is the most important lesson for all investors and Essentials of Technical Analysis for Financial Markets is a great start. If you choose to ignore technical analysis, I guarantee a lifetime of very difficult money-making.
Michael Covel, author of Trend Following and The Complete TurtleTrader
Think of this as financial market technical analysis 101
A valuable resource for traders at all skill levels, Essentials of Technical Analysis for Financial Markets equips you with the knowledge you need to analyze any major financial market. This accessible guide to the art and science of technical analysis points you to a wealth of essential methods for identifying potentially high-probability trading opportunities. Focusing on the key information youll need as a trader or investor, author and leading technical strategist James Chen helps you take on any financial market effectively, manage risk, and target profitability.
Take a look inside this indispensable book for world-class guidance on:
How you can pursue profit in the financial markets using technical analysis Principles of price action analysis and trading Chartsincluding bars, candlesticks, and point and figure The key concept of trend Support and resistance Making the most of financial drawing tools, chart patterns, indicators, and other essential elements of technical analysis
Top technical trading strategies, risk control techniques, and money management concepts
Need the ultimate quick-start guide to technical analysis in the financial markets? Essentials of Technical Analysis for Financial Markets explains it all in a way that helps you hit the ground running and take your financial destiny into your own hands.
JAMES CHEN, CTA, CMT, is Chief Technical Strategist at FX Solutions, a global leader in foreign exchange trading. An expert on technical analysis and financial market trading, he is also a regis-tered Commodity Trading Advisor (CTA) and a Chartered Market Technician (CMT). Mr. Chen contributes daily and intraday technical analysis to key financial media, is a frequent speaker at trading seminars, and has authored numerous articles on trading strategies and technical analysis in major financial publications. His previous book, Essentials of Foreign Exchange Trading (Wiley), has become an industry-standard guide for currency traders.
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ESSENTIALSof TechnicalAnalysis forFinancial Markets
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ESSENTIALS SERIESThe Essentials Series was created for busy business advisory and corporate professio-
nals. The books in this series were designed so that these busy professionals can
quickly acquire knowledge and skills in core business areas.
Each book provides need-to-have fundamentals for those professionals who
Get up to speed quickly, because they have been promoted to a new position orhave broadened their responsibility scope
Manage a new functional area Brush up on new developments in their area of responsibility Add more value to their company or clients
Other books in this series include:
Essentials of Accounts Payable, Mary S. Schaeffer
Essentials of Balanced Scorecard, Mohan Nair
Essentials of Business Ethics, Denis Collins
Essentials of Business Process Outsourcing, Thomas N. Duening and Rick L. Click
Essentials of Capacity Management, Reginald Tomas Yu-Lee
Essentials of Cash Flow, H.A. Schaeffer, Jr.
Essentials of Corporate Fraud, Tracy L. Coenen
Essentials of Corporate Governance, Sanjay Anand
Essentials of Corporate Performance Measurement, George T. Friedlob, Lydia L.F. Schleifer,
and Franklin J. Plewa, Jr.
Essentials of Cost Management, Joe and Catherine Stenzel
Essentials of Credit, Collections, and Accounts Receivable, Mary S. Schaeffer
Essentials of CRM: A Guide to Customer Relationship Management, Bryan Bergeron
Essentials of Enterprise Compliance, Susan D. Conway and Mara E. Conway
Essentials of Financial Analysis, George T. Friedlob and Lydia L. F. Schleifer
Essentials of Financial Risk Management, Karen A. Horcher
Essentials of Foreign Exchange Trading, James Chen
Essentials of Licensing Intellectual Property, Paul J. Lerner and Alexander I. Poltorak
Essentials of Knowledge Management, Bryan Bergeron
Essentials of Managing Corporate Cash, Michele Allman-Ward and James Sagner
Essentials of Managing Treasury, Karen A. Horcher
Essentials of Patents, Andy Gibbs and Bob DeMatteis
Essentials of Payroll Management and Accounting, Steven M. Bragg
Essentials of Sarbanes-Oxley, Sanjay Anand
Essentials of Shared Services, Bryan Bergeron
Essentials of Supply Chain Management, Michael Hugos
Essentials of Trademarks and Unfair Competition, Dana Shilling
Essentials of XBRL, Bryan Bergeron
For more information on any of the above titles, please visit www.wiley.com.
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ESSENTIALSof TechnicalAnalysis forFinancial Markets
John Wiley & Sons, Inc.
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Copyright # 2010 by James Chen. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.Published simultaneously in Canada.
No part of this publication may be reproduced, stored in a retrieval system, ortransmitted in any form or by any means, electronic, mechanical, photocopying,recording, scanning, or otherwise, except as permitted under Section 107 or 108 ofthe 1976 United States Copyright Act, without either the prior written permissionof the Publisher, or authorization through payment of the appropriate per-copy feeto the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA01923, (978) 750-8400, fax (978) 646-8600, or on the web at www.copyright.com.Requests to the Publisher for permission should be addressed to the PermissionsDepartment, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201)748-6011, fax (201) 748-6008, or online at http://www.wiley.com/go/permissions.
Limit of Liability/Disclaimer of Warranty: While the publisher and author haveused their best efforts in preparing this book, they make no representations orwarranties with respect to the accuracy or completeness of the contents of thisbook and specifically disclaim any implied warranties of merchantability or fitnessfor a particular purpose. No warranty may be created or extended by salesrepresentatives or written sales materials. The advice and strategies containedherein may not be suitable for your situation. You should consult with aprofessional where appropriate. Neither the publisher nor author shall be liable forany loss of profit or any other commercial damages, including but not limited tospecial, incidental, consequential, or other damages.
For general information on our other products and services or for technical support,please contact our Customer Care Department within the United States at (800)762-2974, outside the United States at (317) 572-3993 or fax (317) 572-4002.
Wiley also publishes its books in a variety of electronic formats. Some content thatappears in print may not be available in electronic books. For more informationabout Wiley products, visit our web site at www.wiley.com.
Library of Congress Cataloging-in-Publication Data:Chen, James, 1971-Essentials of technical analysis for financial markets / James Chen.p. cm.(Essentials series)
Includes index.ISBN 978-0-470-53729-9 (pbk.)
1. Investment analysis. I. Title.HG4529.C456 2010332.63 02042dc22 2009051054
Printed in the United States of America
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To my parents, my wife,my children, and technicalanalysts everywhere
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1 Introduction to Technical Analysis:
Pursuing Profit in the Financial Markets 1
What Is Technical Analysis? 2
Technical versus Fundamental 2
What to Expect 5
2 The Story of Technical Analysis:
From the Japanese Rice Markets to
Dow Theory to Automated Tr