Monday, March 19, 2007

Technical Analysis Books

For the most part, the technical analysis books that I've read have been pretty lame. They usually just tell you what to do when a certain pattern appears or explain what to do if a certain indicator gives a buy or sell signal. A good example of this is the recent TA book of Gerald Appel, the inventor of the MACD (an indicator that I don't use). I would not waste one's money on this book. I found it completely useless.

I just finished a TA book that is a definite exception to the rule. "Technical Analysis: Plain and Simple, 2nd Edition", written by Michael Kahn not only gives a comprehensive overview of most of the important chart patterns and indicators, but also tells you how and why they work. Kahn has a degree in physics and his scientific training definitely comes through in this book. Kahn also covers many aspects of risk/reward and money management, skills that most novice investors lack.

If you are looking for an introduction to TA, I would highly recommend this book.

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