We review the 13 best technical analysis books that Chartered Market Technicians (CMTs) and Certified Financial Technical Analysts (CFTEs) study to qualify as professional technical analysts.
To master stock market technical analysis, sentiment, and stock charts, you must study the books professional technical analysts use. These books help analysts land high-paying jobs with investment banks and advisory firms.
Do you want to successfully attempt to trade stocks, commodities, and foreign exchange currencies? If so, you need to study Technical Analysis (TA). TA is essentially the study of Supply and Demand, Volume and Price through an array of different lenses called Stock Charts.
Professional Market Technical Analysts like myself study for an IFTA (International Federation of Technical Analysts) exam or the Chartered Market Technician (CMT) exam, which are industry-recognized certifications.
Best Technical Analysis Books
- Technical Analysis of the Financial Markets
- Technical Analysis Explained
- Cloud Charts
- Forecasting Financial Markets
- Technical Analysis
- Japanese Candlestick Charting Techniques
- The Definitive Guide to Point and Figure
- R N Elliott’s Masterworks
- Ichimoku Charts
- Breakthroughs in Technical Analysis
- Mastering Hurst Cycle Analysis
- 21st Century Point & Figure
- Quantitative Trading Systems
1. Technical Analysis of the Financial Markets
John Murphy’s “Technical Analysis of the Financial Markets” is a comprehensive guide to using technical analysis to trade stocks, bonds, and commodities.
The book covers everything from interpreting charts and trend lines to more advanced techniques such as Elliott Wave analysis. Murphy provides real-world examples to illustrate how technical analysis can be used to identify and trade market opportunities.
He also includes several helpful appendices, including one that lists all the indicators and oscillators used in the book.
This book is also a prerequisite reading for any serious or professional technical analyst and is a core IFTA exam syllabus for the (International Federation of Technical Analysts).
Positives: One of my favorite Technical Analysis reference books published by the New York Institute of Finance, this book is well presented and easy to understand.
Negatives: A mind-blowing amount of information; however, it does not backtest the indicators to show if they are effective in the practical world.
Score 72% – Content: 5/5 – Applicability: 3/5 – Readability: 4/5 – Fundamentals: 1/5 – Technical Analysis: 5/5
2. Technical Analysis Explained
One of the Bibles of Technical Analysis and one of the best. The author Martin Pring is a famous technical analyst, and the depth of the value of this book is unmistakable.
This book is a prerequisite read for any serious or professional technical analyst and is a core IFTA exam syllabus for the (International Federation of Technical Analysts) of which I am certified.
Positives: With 600 pages of detailed Technical Analysis, the content’s quality and quantity can be overwhelming.
Negatives: Combining the best of this book and covering some fundamental analysis would provide an improved and more efficient way to learn.
See the Liberated Stock Trader Book for this combination.
Score 76% – Content:5/5 – Applicability:4/5 Readability:4/5 – Fundamentals:1/5 – Technical Analysis:5/5
[Related Article: The 10 Best Stock Market Analysis Software Programs]
3. Cloud Charts
“Cloud Charts: Trading Success with the Ichimoku Technique” is the best book for trading with Japanese Ichimoku charts. Author David Linton is a trader and the author of two other books on technical analysis.
The Ichimoku Technique is a technical analysis method that relies on four indicators to determine when to buy or sell a security. The Ichimoku Technique can be used to trade stocks, futures, commodities, and forex.
The book provides a detailed description of how cloud chart works and how they can be used together to make trading decisions.
It also includes case studies of how the technique is used for trading various securities. Overall, the book provides a comprehensive guide to using the Ichimoku Technique for trading success.
Recognized as an authority on Cloud Charts, David Linton’s book on Ichimoku Techniques is core IFTA reading.
4. Forecasting Financial Markets
“Forecasting Financial Markets” by Tony Plummer is a guide to forecasting financial markets intended for individual and institutional investors. The book begins by discussing the importance of forecasting and describes different forecasting methods, including technical, fundamental, and sentiment analysis.
Each method is explained in detail, with examples of how it can be used to predict market trends. The book also includes a risk management section covering position sizing, risk tolerance, and hedging. Overall, “Forecasting Financial Markets” provides a comprehensive overview of financial forecasting and is a valuable resource for investors of all levels of experience.
5. Technical Analysis
The book “Technical Analysis: The Complete Resource for Financial Market Technicians” by Kirkpatrick & Dahlquist is a comprehensive guide to technical analysis. The book covers everything from the basics of technical analysis to more advanced concepts.
The authors provide real-world examples to help illustrate how technical analysis can be used in practice.
Overall, the book provides a thorough overview of technical analysis and is a valuable resource for anyone interested in this subject.
Uniquely and importantly, the book focuses on the flow of funds, system trading, money management, sentiment, and a brief look at statistics.
The book also covers backtesting and includes various academic studies to back up assertions—lots of charts and indicators and core reading for the CMT (Chartered Market Technician) Exam.
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6. Japanese Candlestick Charting Techniques
From the man who introduced candlestick charting to the West, this is the updated 2nd edition of the original.
The book “Japanese Candlestick Charting Techniques” by Steve Nison is a guide to understanding and using candlestick charts to predict stock prices. The book introduces candlesticks and explains each candle’s different parts.
It then discusses using candlesticks to identify trends, reversals, and price patterns. The book includes several case studies to help illustrate how candlesticks can be used in real-world trading situations.
Candlestick charts are used routinely today and are an essential part of building your charting methodology.
Candlesticks give insights into short-term supply and demand scenarios and enhance the speed of pattern recognition.
7. The Definitive Guide to Point and Figure
The Definitive Guide to Point and Figure by Jeremy du Plessis is a book about the point and figure charting method.
The book covers everything from how to set up a chart to identifying trendlines and formations.
It also includes several case studies demonstrating how point and figure can be used to spot opportunities in the market.
Understanding point and figure charting is essential to the IFTA certification, and there are questions in the exam paper on this topic. Point & Figure (P&F) was a real eye-opener for me.
Many of the major stock market analysis software offer P&F charts now as standard, which is a welcome resurgence of the technique. To see which software has P&F charts read the article: What is point & Figure Charting?
8. R N Elliott’s Masterworks
The book “R N Elliott’s Masterworks, the Definitive Collection by Robert Prechter” is a compilation of the work of R N Elliott, the father of Elliott Wave Theory. The book contains Elliott’s most important articles and covers everything from the basics of Elliott Wave Theory to advanced topics.
Overall, the book provides a comprehensive overview of Elliott Wave Theory and is a great resource for anyone interested in learning more about this unique approach to market analysis.
I had the pleasure of hearing Robert Prechter speak on socioeconomic theory at the IFTA World Conference in 2014, and he is a giant in the industry. The Definitive Collection This book compiles R.N. Elliott’s original writings on the Wave Principle and presents it to you in a single, all-inclusive book.
Devour the three ground-breaking works, long out of print, in which Elliott first described the Wave Principle to the world.
9. Ichimoku Charts
Ichimoku Charts is a book that teaches traders how to use Ichimoku Kinko Clouds technical analysis. The book is written by Nicole Elliott, a trader, and technical analyst who has been using the Ichimoku method for over a decade. The book introduces Ichimoku Kinko Clouds, including what they are and how they are used.
Elliott then teaches readers how to interpret the various signals generated by the clouds, including crossovers, trendlines, and divergence indicators. The book concludes with a section on trading strategies that can be used with Ichimoku charts.
Overall, Ichimoku Charts is an in-depth guide to using the Ichimoku Kinko Clouds technique for technical analysis.
10. Breakthroughs in Technical Analysis
David Keller’s “Breakthroughs in Technical Analysis” is a guide to understanding and using technical analysis to trade the financial markets. The book begins by explaining the basics of technical analysis, including price charts, trendlines, and momentum indicators.
It then discusses more advanced topics such as chart patterns, Elliott wave analysis, and Fibonacci retracements. The book includes numerous real-world examples to illustrate how technical analysis can be used to identify trading opportunities.
It is a comprehensive guide for traders of all levels of experience.
The recommended section in this book is the GANN theory section developed by W.D. Gann.
This is usually a critical piece of the exam, but it can also be challenging to learn as the esoteric concepts, in theory, are more like taking a step into the twilight zone.
11. Mastering Hurst Cycle Analysis
Christopher Grafton’s “Mastering Hurst Cycle Analysis” provides an in-depth exploration of Hurst cycle analysis, a tool used to predict and trade financial market cycles.
The book introduces readers to the basics of Hurst cycle analysis, including defining a cycle, identifying cycles in data, and the four types of cycles.
Grafton then moves on to more advanced topics, such as cycle decomposition, statistical testing for cycles, and using Hurst cycle analysis for forecasting.
Throughout the book, Grafton provides numerous real-world examples to help illustrate the concepts being discussed.
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12. 21st Century Point & Figure
21st Century Point & Figure by Jeremy du Plessis is a guide to understanding and using point and figure charting in today’s markets.
Du Plessis covers the basics of reading point and figure charts and more advanced techniques like trendlines and breakouts. He also explains how to use point and figure charts in conjunction with other technical indicators to improve your trading results.
Overall, I found 21st Century Point & Figure a well-written, informative book. Du Plessis does a good job of explaining the mechanics of point and figure charting and provides plenty of real-world examples to help illustrate his points.
This book is for you if you’re looking for a comprehensive guide to using point and figure charts in today’s markets.
13. Quantitative Trading Systems
Practical Methods for Design, Testing, and Validation.
Building a robust trading system is essential to success. This is precisely what Quants (Quantitative Analysts) do for their day job.
Quantitative Trading Systems by Dr. Howard B. Bandy is a book about developing and using quantitative trading systems in the financial markets. The book covers many topics, from basic concepts to more advanced strategies.
One of the key points made by the author is that a successful quantitative trading system is not simply a set of mechanical rules but must be tailored to the individual trader’s risk tolerance and investment goals. The book includes numerous examples and case studies to illustrate the concepts discussed.
Best Technical Analysis Books Summary
If I were to buy only four technical analysis books, they would be Technical Analysis of the Financial Markets, Forecasting Financial Markets, Breakthroughs in Technical Analysis, and Quantitative Trading Systems.
Video: Best Technical Analysis Books
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