Submitted by Dave Wright July 2004

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Submitted by Dave WrightJuly 2004

• Resources for Learning About
• Technical Analysis

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TECHNICAL ANALYSIS general

• Unlike TM, TA is not a religion or philosophy.
• Distinguish between what is interesting, and what
  is useful
  
• Try to avoid becoming process compulsive

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TECHNICAL ANALYSIS scope

• TA is primarily about TIMING WHEN to buy, and
  WHEN to sell
  
• Fundamental analysis is often used in deciding
  WHAT to buy and WHY although TA can help screen
  Buy candidates
  
• Most (but not all) TA techniques are an effort to
  be predictive

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TECHNICAL ANALYSIS general

• Using TA, the realistic goal is to find an edge
  not a perfect formula
  
• The best in this business are wrong over 1/3 of
  the time. So 55 right marks a pretty valuable
  technique
  
• A very few techniques are right over 75 of the
  time and these are rarely triggered

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TECHNICAL ANALYSIS general

• One size does not fit all. What are YOUR goals?
  How long is YOUR typical holding period?
  
• Many of the best TA techniques and literature
  come from the futures markets
  
• Many of the best TA people do NOT trade the stock
  market the most difficult market to trade

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TECHNICAL ANALYSIS scope

• Relationship to trading (say, people whose
  typical holding period is less than two weeks)
  
• Relationship to quantitative analysis all TA
  is essentially quantitative, but some QA is not
  TA (for example, seasonality)

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TECHNICAL ANALYSIS scope

• Often applied to the U.S. stock market indices
  (SPX, NDX, etc.)
  
• Often applied to individual stocks
• But its important to recognize that TA is also
  used in many other markets and tradeables such
  as commodities, bond mutual funds with even
  greater success

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TECHNICAL ANALYSIS scope

• TA / quantitative analysis
• TA / short-term trading
• TA is used by both short-term traders and
  longer-term investors
  

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RESOURCES to learn about TA

• Websites to research books on TA
• Books buy and read 2 this year!
• Periodicals (mags. newsltrs.)
• Courses (incl. tapes and CD ROMs)
• Software

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TA RESOURCES contd

• Websites that teach about TA
• User groups learn from peers
• National ( intl) TA conferences
• Websites to follow along with, or that offer
  advice

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TA the famous compilers

• Edwards Magee (from 1948)
• Martin Pring (from 1980)
• John Murphy (from 1986)
• Colby Meyers (1988, 2002)
• Other, less famous compilations may also be
  excellent

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