Rating: 
- Comprehensive Book on Chart Pattern Analysis
Technical Analysis of Stock Trends is considered to be the Bible of Technical Analysis. I would revise that to say that it's the Bible of chart pattern analysis, because it doesn't go into modern technical analysis methods (indicators etc.). At any rate, it's a comprehensive book on classical technical analysis (that being chart patterns).
The main down sides to this book are that it's a dry read and it lacks an evidence-based approach. What I mean by that last part is that many times the authors simply say "in our opinion this is so" or "in our experience we find that this happens." That really equates to a focus group of one and can be a recipe for causality errors/confusion. You're essentially left with having to take the authors word for it.
At any rate, it's an in-depth, detailed review of chart patterns, thus a valuable resource for those interested in an in-depth study of TA. But, I wouldn't base my investment decisions based solely on this book and it's not the only book that I would use to study TA.
Rating:
- too many annoying garbage by the 3rd author in 9th ed.
Very hard to read. Bassetti's writings are B.S.
It maybe the best TA book in 1950. But right now I can not see why we need to read this one when we have the other two books (Technical Analysis of the financial markets, How technical analysis works), which are written by truely outstanding authors.
Rating: - The lone resident of the Tabernacle
Outstanding!!
The 9th edition's BASING POINTS could win the Nobel Prize for converting Anal-ysis into Analysis.
It answers the following questions:
(1) Why your investing/trading engine could only hum -- (answer: it never knew the words & never had a ruler).
(2) What to do about Robert Prechter?
(3) With BASING POINTS it is now almost certain that the author has not yet fired 6 shots, i.e. this field is so deep in terms of conceptual understanding, that more is sure to follow. See STAIRSTOPS (a separate pdf file) to dig what I'm talking about.
(4) Is the editor the person whose coming was foretold or are we to expect another?
:)
Rating: - Old classic (5th edition) is much better!
Most of the information presented in this book comes from the old classic 1948 version from the original authors John Magee and Robert D Edwards.
Technical Analysis of Stock Trends
You get more "bang for your buck" if you buy the used (Revised) 5th edition and still have some money left in your pocket.
I remember paying just $12.50 for 4th edition in the early 60's. I don't think the supplements(upgrade) to the text to bring in modern stocks is worth the extra bucks. Why spend the extra bucks and get hoodwinked? Charts are always open to interpretation but a master trader who trades everyday can eyeball charts and interpreted them a lot better. Haven't you noticed in everyday life the most skillful people who have the most knowledge come from family generations who did the same business.
You need to work at it to be just as skillful in any business since making profits in a stockmarket does not come easy at first.
What you see is the same type of stock patterns that your Grandpa would have seen if he traded stocks. These price patterns are like road signs you should be able to visualize them on any chart regardless what time-frame. Not knowing stock patterns when they are completed is like driving through stop signs. After you have read this book you should be very skillful in drawing trend lines,channel lines, and identifying trends on any chart. Even today using a newer stock symbol you see the same old basic chart patterns occur as the old fashioned charts a century ago. No oscillators or momentum-based indicators are needed on your chart. Experience is your best teacher when you look at chart patterns and there are many more to identify that you discover on your own. In the market you must look at what is happening now then predict what is going to happen, not what has already happened to make money. The market always looks through the front windshield not through the rear view mirror like the news media, just after the fact.
Rating: - Not just updated, completely new and must have...
If Edwards and Magee wrote the bible of technical analysis in 1948 when they first published "Technical Analysis of Stock Trends." then why do we need a Ninth Edition of their classic? This question was foremost in my mind as I began reading this recently released version of a book I spent many hours with as I prepared for the CMT exams. After reading all 832 pages, I realized that in many ways, the financial markets, and technical analysis, are finally maturing to the point where we can fully grasp the significance of what was first written almost sixty years ago. With a focus on pragmatic portfolio theory, editor Charles Bassetti significantly contributes to the technical analysis body of knowledge especially related to tactics, and has created a book worth a space on every technician's bookshelf.
In this edition, Bassetti delivers much more than an update - it's actually a new book. He focuses on strategies for increasing profits:
* The basics of traditional chart analysis are clearly presented, just as Robert Edwards meant for them to be. In keeping with the practice of earlier editions, Bassetti retains the original charts showing examples of patterns from the 1940s and earlier. He also includes more than two dozen new charts, demonstrating that the same old patterns still work today. The detailed discussion of the market psychology that forms these patterns may stimulate modern analysts to program the patterns.
* Adds a comprehensive explanation of Magee's "basing points" procedure for setting initial and trailing stops on any position. Bassetti adds a chapter and charts to clarify this powerful concept, which in itself is worth more than the cost of the book.
* For what may be the first time, Bassetti provides an annotated chart of the Dow, combining an in-depth discussion of Dow Theory with a visual history of the signals. We've all seen tables showing the sell signal in Oct 1929 or the buy signal in late-1990 which lasted more than seven years, but the chart erases any doubt that Dow Theory is a valuable timing tool. Creating a comprehensive source on the Dow Theory, he also includes an overview of Robert Colby's method to automate the signals.
* Provides a link to www.edwards-magee.com, which offers downloadable material that supplements the text. As one example, readers can download pdf files of the Dow Theory signals for closer examination.
* Offers new perspectives on short-term and futures trading. The extensive new material on commodity trading, including a complete trading plan, was not addressed in previous editions.
Bassetti also ensures the reader understands the similarities between Magee's Sensitivity Index and Modern Portfolio Theory's Beta; and the striking resemblance of Magee's Composite Leverage to the financial engineering concept of Value at Risk. Readers of previous editions may not have realized that Magee developed these concepts decades before Nobel Prize-winning work was undertaken in these areas. Magee wrote in the language of the trader (semi-log charts), rather than the academician and his ideas have been overlooked by economic theorists.
A classic book is one that stands the test of time. No one can argue that Technical Analysis of Stock Trends fails in this regard. Patterns that worked a hundred years ago are still found in financial markets and they still work. The forecasting ability of patterns lies in their ability to document the history of human nature, which remains unchanged over many centuries.
Another feature of classic works is a unique style. Edwards and Magee filled their work with examples - current at the time of publication. They wrote with clarity and ease of style not usually found in textbooks. Their text was a practical "how to" manual that explained the "study of the action of the market itself" in concrete terms. It appealed to those seeking the Holy Grail on Wall Street, and to those serious students of the markets seeking an edge. In this new edition, Bassetti retains all of their style and introduces his own, which in all ways is similar to the original, but with a modern edge.
Bassetti believes that Magee's concept of basing points is worth a great deal of additional study. This is one of the most significant contributions he makes to the new edition, updating this section in the tactics to ensure that all traders understand this method of stop placement. His example is clear, and the reader can instantly implement this technique, which Bassetti thinks of as one of the most valuable in the book.
Some question whether classical chart reading is still a valid discipline in an era defined by cheap data, powerful scanning and backtesting software, instantaneous execution and quantitative analysis. After reading this book, you'll be left with a deeper appreciation of the value of chart reading and will become an even stronger proponent of technical analysis in modern markets.
- Comprehensive Book on Chart Pattern AnalysisTechnical Analysis of Stock Trends is considered to be the Bible of Technical Analysis. I would revise that to say that it's the Bible of chart pattern analysis, because it doesn't go into modern technical analysis methods (indicators etc.). At any rate, it's a comprehensive book on classical technical analysis (that being chart patterns).
The main down sides to this book are that it's a dry read and it lacks an evidence-based approach. What I mean by that last part is that many times the authors simply say "in our opinion this is so" or "in our experience we find that this happens." That really equates to a focus group of one and can be a recipe for causality errors/confusion. You're essentially left with having to take the authors word for it.
At any rate, it's an in-depth, detailed review of chart patterns, thus a valuable resource for those interested in an in-depth study of TA. But, I wouldn't base my investment decisions based solely on this book and it's not the only book that I would use to study TA.
Rating:
- too many annoying garbage by the 3rd author in 9th ed.Very hard to read. Bassetti's writings are B.S.
It maybe the best TA book in 1950. But right now I can not see why we need to read this one when we have the other two books (Technical Analysis of the financial markets, How technical analysis works), which are written by truely outstanding authors.
Rating:
- The lone resident of the TabernacleOutstanding!!
The 9th edition's BASING POINTS could win the Nobel Prize for converting Anal-ysis into Analysis.
It answers the following questions:
(1) Why your investing/trading engine could only hum -- (answer: it never knew the words & never had a ruler).
(2) What to do about Robert Prechter?
(3) With BASING POINTS it is now almost certain that the author has not yet fired 6 shots, i.e. this field is so deep in terms of conceptual understanding, that more is sure to follow. See STAIRSTOPS (a separate pdf file) to dig what I'm talking about.
(4) Is the editor the person whose coming was foretold or are we to expect another?
:)
Rating:
- Old classic (5th edition) is much better!Most of the information presented in this book comes from the old classic 1948 version from the original authors John Magee and Robert D Edwards.
Technical Analysis of Stock Trends
You get more "bang for your buck" if you buy the used (Revised) 5th edition and still have some money left in your pocket.
I remember paying just $12.50 for 4th edition in the early 60's. I don't think the supplements(upgrade) to the text to bring in modern stocks is worth the extra bucks. Why spend the extra bucks and get hoodwinked? Charts are always open to interpretation but a master trader who trades everyday can eyeball charts and interpreted them a lot better. Haven't you noticed in everyday life the most skillful people who have the most knowledge come from family generations who did the same business.
You need to work at it to be just as skillful in any business since making profits in a stockmarket does not come easy at first.
What you see is the same type of stock patterns that your Grandpa would have seen if he traded stocks. These price patterns are like road signs you should be able to visualize them on any chart regardless what time-frame. Not knowing stock patterns when they are completed is like driving through stop signs. After you have read this book you should be very skillful in drawing trend lines,channel lines, and identifying trends on any chart. Even today using a newer stock symbol you see the same old basic chart patterns occur as the old fashioned charts a century ago. No oscillators or momentum-based indicators are needed on your chart. Experience is your best teacher when you look at chart patterns and there are many more to identify that you discover on your own. In the market you must look at what is happening now then predict what is going to happen, not what has already happened to make money. The market always looks through the front windshield not through the rear view mirror like the news media, just after the fact.
Rating:
- Not just updated, completely new and must have...If Edwards and Magee wrote the bible of technical analysis in 1948 when they first published "Technical Analysis of Stock Trends." then why do we need a Ninth Edition of their classic? This question was foremost in my mind as I began reading this recently released version of a book I spent many hours with as I prepared for the CMT exams. After reading all 832 pages, I realized that in many ways, the financial markets, and technical analysis, are finally maturing to the point where we can fully grasp the significance of what was first written almost sixty years ago. With a focus on pragmatic portfolio theory, editor Charles Bassetti significantly contributes to the technical analysis body of knowledge especially related to tactics, and has created a book worth a space on every technician's bookshelf.
In this edition, Bassetti delivers much more than an update - it's actually a new book. He focuses on strategies for increasing profits:
* The basics of traditional chart analysis are clearly presented, just as Robert Edwards meant for them to be. In keeping with the practice of earlier editions, Bassetti retains the original charts showing examples of patterns from the 1940s and earlier. He also includes more than two dozen new charts, demonstrating that the same old patterns still work today. The detailed discussion of the market psychology that forms these patterns may stimulate modern analysts to program the patterns.
* Adds a comprehensive explanation of Magee's "basing points" procedure for setting initial and trailing stops on any position. Bassetti adds a chapter and charts to clarify this powerful concept, which in itself is worth more than the cost of the book.
* For what may be the first time, Bassetti provides an annotated chart of the Dow, combining an in-depth discussion of Dow Theory with a visual history of the signals. We've all seen tables showing the sell signal in Oct 1929 or the buy signal in late-1990 which lasted more than seven years, but the chart erases any doubt that Dow Theory is a valuable timing tool. Creating a comprehensive source on the Dow Theory, he also includes an overview of Robert Colby's method to automate the signals.
* Provides a link to www.edwards-magee.com, which offers downloadable material that supplements the text. As one example, readers can download pdf files of the Dow Theory signals for closer examination.
* Offers new perspectives on short-term and futures trading. The extensive new material on commodity trading, including a complete trading plan, was not addressed in previous editions.
Bassetti also ensures the reader understands the similarities between Magee's Sensitivity Index and Modern Portfolio Theory's Beta; and the striking resemblance of Magee's Composite Leverage to the financial engineering concept of Value at Risk. Readers of previous editions may not have realized that Magee developed these concepts decades before Nobel Prize-winning work was undertaken in these areas. Magee wrote in the language of the trader (semi-log charts), rather than the academician and his ideas have been overlooked by economic theorists.
A classic book is one that stands the test of time. No one can argue that Technical Analysis of Stock Trends fails in this regard. Patterns that worked a hundred years ago are still found in financial markets and they still work. The forecasting ability of patterns lies in their ability to document the history of human nature, which remains unchanged over many centuries.
Another feature of classic works is a unique style. Edwards and Magee filled their work with examples - current at the time of publication. They wrote with clarity and ease of style not usually found in textbooks. Their text was a practical "how to" manual that explained the "study of the action of the market itself" in concrete terms. It appealed to those seeking the Holy Grail on Wall Street, and to those serious students of the markets seeking an edge. In this new edition, Bassetti retains all of their style and introduces his own, which in all ways is similar to the original, but with a modern edge.
Bassetti believes that Magee's concept of basing points is worth a great deal of additional study. This is one of the most significant contributions he makes to the new edition, updating this section in the tactics to ensure that all traders understand this method of stop placement. His example is clear, and the reader can instantly implement this technique, which Bassetti thinks of as one of the most valuable in the book.
Some question whether classical chart reading is still a valid discipline in an era defined by cheap data, powerful scanning and backtesting software, instantaneous execution and quantitative analysis. After reading this book, you'll be left with a deeper appreciation of the value of chart reading and will become an even stronger proponent of technical analysis in modern markets.