To invest successfully or trade in Stocks, Options, Forex, or even Mutual Funds, it is imperative to know and understand price and market movements that can only be learned from Technical Analysis, which you will get a step-by-step guide to from reading “Charting and Technical Analysis” by Fred McAllen.
Author: Fred McAllen
Topics: (1) Technical Analysis
Year: 2012 (1st edition)
Number of Pages: 275
Language: English
Publisher: Self publication
Summary
“Charting and Technical Analysis” by Fred McAllen is a comprehensive guide aimed at providing traders and investors with a solid foundation in the principles of technical analysis and charting techniques. McAllen’s book is designed to help readers understand market behaviors, identify trends, and make informed trading decisions using various technical tools and strategies.
Key Points of the Book:
- Introduction to Technical Analysis:
- McAllen begins with an overview of technical analysis, explaining its importance and how it differs from fundamental analysis.
- The book emphasizes the historical context of technical analysis, tracing its development and evolution.
- Understanding Price Charts:
- Detailed explanations of different types of price charts, including line charts, bar charts, and candlestick charts.
- The author discusses the significance of each chart type and how they can be used to interpret market movements.
- Trend Analysis:
- McAllen introduces the concept of trends and how to identify them.
- Techniques for distinguishing between short-term, intermediate-term, and long-term trends are explored.
- The book explains the importance of trendlines and channels in tracking market direction.
- Support and Resistance:
- An in-depth look at support and resistance levels, including how they are formed and why they are crucial for trading.
- Strategies for identifying these levels and using them to make trading decisions.
- Technical Indicators and Oscillators:
- The book covers various technical indicators such as Moving Averages, Relative Strength Index (RSI), and Moving Average Convergence Divergence (MACD).
- McAllen explains how to use these indicators to confirm trends, measure momentum, and predict potential reversals.
- Chart Patterns:
- Detailed descriptions of common chart patterns such as head and shoulders, double tops and bottoms, and triangles.
- The author provides guidance on how to recognize these patterns and use them to anticipate future price movements.
- Volume Analysis:
- The role of volume in confirming price movements and trends is discussed.
- McAllen emphasizes the importance of analyzing volume to understand the strength behind price movements.
- Trading Strategies:
- Practical trading strategies are provided, incorporating the various tools and concepts discussed in the book.
- McAllen emphasizes risk management and the importance of having a trading plan.
- Psychological Aspects of Trading:
- The book addresses the psychological challenges traders face, such as fear and greed.
- McAllen offers advice on maintaining discipline and emotional control in trading.
“Charting and Technical Analysis” by Fred McAllen is a valuable resource for anyone interested in understanding and applying technical analysis in their trading. The book is structured to cater to both beginners and more experienced traders, providing clear explanations, practical examples, and actionable strategies. McAllen’s emphasis on the psychological aspects of trading adds an essential dimension to the technical skills covered, making it a well-rounded guide for navigating the financial markets.
Rating
We have chosen to give “Charting and Technical Analysis” the following rating:
Overall rating: ★★★★☆
Fred McAllen’s “Charting and Technical Analysis” offers a thorough and practical guide for traders looking to deepen their understanding of technical analysis. The book’s strengths lie in its clear explanations, detailed examples, and the breadth of topics covered. It is well-suited for both beginners and more advanced traders.
Style: ★★★★☆
McAllen’s writing style is clear, concise, and accessible. He explains complex concepts in a straightforward manner, making the material easier to understand. The book avoids overly technical jargon, which is beneficial for beginners. However, some readers might find the style a bit dry and academic at times.
Structure: ★★★★☆
The book is well-structured, starting with basic concepts and gradually progressing to more advanced topics. Each chapter builds on the previous one, ensuring that readers develop a comprehensive understanding of technical analysis. The inclusion of practical examples and step-by-step instructions enhances the learning experience. However, the flow could be improved with more real-life case studies and examples of actual trades.
Level: ★★★★☆
The book strikes a good balance between catering to beginners and providing valuable insights for more experienced traders. It covers fundamental concepts for those new to technical analysis while also delving into advanced techniques and strategies that seasoned traders will appreciate. Some very advanced traders might find certain sections too basic, but overall, the level is well-judged for a broad audience.
Technical: ★★★★☆
From a technical standpoint, McAllen does an excellent job of explaining various technical analysis tools and strategies. The book covers a wide range of topics, including chart patterns, indicators, trend analysis, and volume analysis. The technical explanations are detailed and well-supported with charts and illustrations. However, some readers might desire more in-depth analysis and advanced technical tools that are not covered in this introductory text.