Technical Analysis of the Financial Markets

Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications (New York Institute of Finance)
by John J. Murphy

This book is known as the bible of technical analysis. Unless you’re only daytrading, you’ll need a solid background in fundamental analysis too, since the fundamentals should tell you what to buy and the technicals should tell you when to buy. Obviously, this is not one of the first books you should read, but it is definitely one you should read at some point. I can’t say that it’s an easy read, but you’ll definitely feel like you learned something if you do manage to get through this one.

The book basically explains the concepts behind technical analysis and then proceeds to go over pretty much everything you’ll ever want to see dealing with charts and patterns. While some of the things seem like they’re pulled out of nowhere, you can pick and choose which patterns and oscillators you want to rely on. I’ve found that different people see different things on charts, so you’ll have to put in some effort, and after looking at hundreds of charts, you’ll start to figure out which indicators are reliable for you. Most of the chart analysis I do on this site is based on the knowledge gleaned from this book so if you’re interested in that, I would definitely give this book a shot.