The Complete Idiot's Guide To Technical Analysis

PART 1
Even before getting into the first official chapter, Information Is Power, the Forward and Introduction contain a fairly good look at both the foundations of technical analysis, and the objectives of the book. The explanations that are then presented for each aspect of technical analysis are detailed enough to give a good look into each facet of the business. It is especially appreciated that in the beginning of the book there are enough references to fundamental analysis to contrast the differences between fundamental and technical analysis trading and investing styles. There is also a clear and helpful differential made between traders and investors.

In fact, defining the differences in the many looks of technical analysis is a large part of the work done in the first few chapters. Reasons are given for when one might use a simple line chart over the more informational candlestick chart. The distinction is made in enough detail to make the differences between them clear. Point and figure charting, and the thinking behind its use, is explained, along with the same kind of information for tick, volume and "float" charts. Visual patterns are an important part of technical analysis, and before getting into the tools of the trade many of the most widely used and accepted price patterns are defined. The wave and swing charts are discussed to the point that the reader will at least know the ideas behind their use. The student gets a good understanding of double tops and bottoms, head and shoulders, and all of the explanations are well illustrated so that in following the text it is easy to visualize what is being discussed. The same is true with the presentation of trading gaps and the various kinds of cups, triangles, flags and pennants.

This tools section takes up a little over a third of the book and covers all that someone just getting started would need to know. The explanations of point and figure charts are quite thorough. The space given the P&F charts provides a basis for understanding some of the other non-price charts. These charts that do not even include price -- volume and float indicators, for instance -- are also given ample explanation.

PART 3
These are the 55 pages I wish were available to me when I first started investing and trading in the markets. If part 2 was about the technical tools of this business, part 3 is the structure, the nuts and bolts and the instruction book for putting it all together. After the reader discovers what technical analysis is all about, what it looks like and what one needs to make trading decisions, this section is the "How to do it" part of the book. When it is time to actually start trading, you need capital, computers, software, data and a place to work. This part of the guide makes these important elements of a beginning trader's work a straightforward set of tasks to accomplish, instead of just a list of "things to do," and it gives helpful ideas on each step.

A trader then needs to decide what they are going to trade: futures, forex, bonds, stocks or ETFs, or a combination of trading vehicles. They need to focus on the trading technique they wish to employ, how they are going to get in and out of their trades, become aware of the many ways to place orders, what each is, and when and how to use them.

After all of that there remains probably the biggest single hurdle an investor or trader needs to become a winner in the trading game and that is a trading plan. This guide makes it clear how important a plan is and gives the reader a framework to build around. Then it explains what needs to be in that plan and how to manage the capital that you come up with for your trading.

Last, but far from least, is the included CD that has short movies that present visual presentation of the lesson materials covered. The demos are mostly about the various indicators, but there are some videos on charts, patterns, support and resistance, and some other information as well. If there was one thing less than positive about this book, it may be the thoroughness with which the demo movies explain each subject discussed, but then the book is called The Complete Idiot's Guide to Technical Analysis. All in all, this is a very good book for anyone who is just starting into the world of technical analysis, and well worth both the money spent to buy it and the time spent to read it.