Technical analysis is all about understanding market psychology. By analyzing charts and trends, technical traders find out potential trade setups.
But it isn’t easy as it seems. You must develop your technical skills to identify price trends, and what other way to identify your skills than reading a good ol’ book?
There are plenty of technical analysis books, but we have cleared the clutter for you. So, here we’ll mention the 5 best technical analysis books you can read.
1. Getting Started in Technical Analysis by Jack Schwager
This book is perfect for you if you are a complete beginner. This book comprises four parts: technical analysis tools, trading systems, technical problems, and a practical trading guide.
The book covers essential technical analysis topics like chart patterns, when to enter and leave an asset, which software to use, and how to create stop-loss orders. Schwager also contains a chapter on 82 stock market rules and observations, which is useful for any beginner.
When you're done reading, you should have a firm understanding of the basic ideas of technical analysis.
2. Technical Analysis of Financial Markets by John Murphy
Technical Analysis of Financial Markets by John Murphy is a detailed guide to applying technical analysis to trade stocks, bonds, and commodities.
The book covers everything from chart interpretation to trend lines to more complex approaches like Elliott Wave analysis. Murphy uses real-life examples to show how technical analysis may be utilized to discover and trade market opportunities.
Murphy's book begins with basic concepts such as the idea of a trend and chart. Then he discusses big reversal patterns, continuation patterns, and long-term charts.
The book is a must-have for anybody looking for a trustworthy guide for technical analysis. It provides the most thorough study of technical analysis accessible anywhere, with chapters covering candlestick charts, stocks and price movements and examples and statistics.
Also, the book includes comprehensive new sections on system creation, complex technical indicators, and new types of charts, such as market profiles.
3. Technical Analysis Explained by Martin Pring
Reading and analyzing many tools used in technical analysis is an art, and no book explains this better than Pring’s classic Technical Analysis Explained.
Some regard Pring's book, Technical Analysis Explained, as the bible of technical analysis books, making it a preferred option among traders just starting out in the markets.
When you encounter difficulties, the book also acts as reference information you can visit every time.
You will learn how to use sophisticated tools and indicators to detect trends and anticipate market movements to include technical analysis realistically.
Pring's distinct combination of conventional ideas and cutting-edge approach can help traders improve their trading game.
4. Technical Analysis from A to Z by Steven B Achelis
Technical Analysis from A to Z serves as a comprehensive guide on technical analysis indicators, chart patterns, theories, advanced trading methods, and much more.
The book's first section covers the basics of technical analysis, including a detailed description of what it is and how it works. It also leads you through various major chart types used in technical analysis and methods such as support and resistance levels.
The second section has a comprehensive vocabulary you should be familiar with. Because technical analysis is a complicated subject, these trading terms are an excellent resource for both beginners and those ready to begin trading.
The book has been revised for the second edition to contain up to 35 additional market indicators for even more knowledge.
5. Encyclopedia of Chart Patterns by Thomas Bulkowski
If you're acquainted with the basics of technical analysis, you might like this in-depth look into chart patterns.
Bulkowski’s comprehensive encyclopedia has over 60 chart patterns, including the head and shoulders, bull flag, and many more, as well as tactics for trading the patterns and what to expect.
Bulkowski begins by discussing how to trade using chart patterns, then delves into patterns you can use to identify when to buy and sell an asset using technical analysis. This kind of detail can benefit you in deciding which patterns to use while trading.
Bulkowski has also published similar studies on swing trading and candlestick charts. Bulkowski's work appeals to every reader because he employs the scientific method of developing a hypothesis, testing and re-testing it, and stating if a theory is valid.
In this book, he established the standard for how technical analysis should be presented, with actual facts regarding how a pattern is detected, how well it works overtime on certain equities, its gain/loss ratio, and other details.
Technical analysis is the most important aspect of trading. You must have an understanding of how technical analysis works in the markets.
The books we mentioned are perfect for every level of trader. So, if you haven’t read them already, go through them, as you’ll learn a lot.