Technical Analysis

10 sheets available

Dow Theory

Dow Theory, developed by Charles Dow in the late 19th century, is the foundational framework of technical analysis. It establishes core principles about market trends, phases, and confirmation signals that remain the basis of modern charting.

Ch. 1Read

Trends & Supports

Trends, Support and Resistance

Trends, support, and resistance are the most fundamental concepts in technical analysis. A trend defines the dominant direction of price movement, while support and resistance levels identify where buying and selling pressure concentrates.

Ch. 2Read

Chart Patterns

Chart patterns are recurring geometric formations on price charts that technical analysts use to forecast future price direction. They are classified as continuation patterns (signaling the trend will resume) and reversal patterns (signaling the trend will change).

Ch. 3Read

Moving Averages

Moving averages smooth price data to identify the underlying trend direction. They are the most widely used technical indicators, serving as dynamic support/resistance levels and generating trend-following signals through crossover systems.

Ch. 4Read

Fibonacci

Fibonacci Retracements and Extensions

Fibonacci tools draw correction and extension levels from Fibonacci ratios (23.6%, 38.2%, 61.8%, 78.6%) and Dow theory's 50% level; they ship with charting software and appear in market commentary. Murphy covers them in chapter 13 of Technical Analysis of the Financial Markets. Tested on the Dow Jones from 1915 to 2003, these ratios (except 23.6%, which the test leaves out) occur no more often than chance (Batchelor and Ramyar, 2006).

Ch. 5Read

Oscillators

Oscillators and Technical Indicators

Oscillators and technical indicators are mathematical tools that transform raw price and volume data into actionable signals. They complement trend analysis by measuring momentum, overbought/oversold conditions, and trend strength.

Ch. 6Read

Volume & OI

Volume and Open Interest

Volume is the total number of shares or contracts traded during a given period. Open interest is the total number of outstanding derivative contracts. Together, they provide crucial confirmation of price movements and insights into market conviction.

Ch. 7Read

Intermarket

Intermarket Analysis

Intermarket analysis studies the relationships between four major asset classes -- stocks, bonds, commodities, and currencies -- to identify leading indicators and confirm trends. Developed primarily by John Murphy, it bridges the gap between technical analysis and macroeconomics.

Ch. 8Read

Money Management

Risk Management and Money Management

Risk management and money management are the discipline of controlling position sizes, setting stop-losses, and managing the risk/reward ratio of each trade. They are widely considered more important than entry signals for long-term trading success.

Ch. 9Read

Elliott Waves

Elliott Wave Theory

Elliott wave theory proposes that markets move in fractal cycles made of five impulse waves and three corrective waves. Murphy devotes chapter 13 of Technical Analysis of the Financial Markets to it. Elliott also held that successive waves tended to conform to Fibonacci ratios; tested on the Dow Jones from 1915 to 2003, the idea is not borne out (Batchelor and Ramyar, 2006).

Ch. 10Read