Books to Learn Price Action Based Technical Analysis

In any investment markets whether its Stock, Forex, Commodity, Cryptocurrency or any other financial markets, there are mainly 2 types of analysis methods that the traders use to predict the future price direction of a security. The first type is called as the Technical Analysis, and the 2nd type is the Fundamental or Economical Analysis. 

Technical Analysis is the method of observing and analyzing the price movements and chart price actions of a security. There are many types of candlestick patterns, price action patterns and indicators can be found in the charts, which can give the direction or forecast the future price movements.

A technical analyst analyzes the price movements or chart price actions using various charting tools and techniques, which we call as the Technical Chart Analysis or Technical Analysis.

Below I listed 5 of the best books to learn price action based technical analysis to become a successful technical analyst and make consistent profit in any of the Financial Markets. These are the books written by the industries top traders and authors. These are the books that are responsible to turn many novice traders into a fully grown experienced professionals. 

Read these books and lift yourself into the next level to become a successful investor in the financial markets.

Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications (New York Institute of Finance)


​Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications (New York Institute of Finance)

Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications (New York Institute of Finance)

By - John J. Murphy

Pages: 576.  Publisher: Prentice Hall Press.

To learn the price action based technical analysis to trade the financial markets as a newbie or intermediate trader, the book "Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications" written by John J. Murphy, can be a best guide to start with. This book covers almost all the necessary information on technical analysis methods to read the market sentiment and forecast the future price movements. 

Mr John J. Murphy has covered many of the major topics of technical analysis such as the Dow Theory, Chart Construction, Trend Analysis, Price Action Reversal Patterns, Continuation Patterns, Japanese Candlestick Patterns, The Elliot Wave theory and many more of the price action pattern techniques, tips and trick to identify them. 

He also explained in detailed about the major indicators to work with the price action patterns such as various types of Moving Average indicators; Use of the major Oscillators - such as MACD, Stochastic, RSI, Commodity channel index and some others. He puts a full section on Stock trading indicators such as AD Divergence, Variations in AD line, McClellan oscillator and some other important indicators to trade the stocks.

You can also find A Checklist, some Advanced Indicators for technical analysis, guide to build a trading plan and many other very important topics on Technical Chart Analysis to trade the investment markets like a professional.

This 576 pages book is a A+ in terms of the value it holds on Technical Analysis. This book is a must for any beginner to intermediate level trader who wants to discover the beauty of technical analysis and make huge profit as being a technical analyst in the financial markets - either its Stock market, Forex or Commodity market. The book can help to stand out on this all.

The Art and Science of Technical Analysis


The Art and Science of Technical Analysis

The Art and Science of Technical Analysis

By - Adam Grimes

Pages: 485.  Publisher: Wiley

The book "The Art and Science of Technical Analysis" by Adam Grimes is a mastery book on Technical Chart analysis. This book is designed not only for a beginner trader, but also for the advanced and experienced traders as well. 

This book does not explained all the chart price action patterns and indicators like all the other books does, rather it explained very clearly of how and why the price action patterns forms, how to read the patterns to understand the market sentiment or traders psychology behind the setup and how to deal with the patterns to become a profitable price action trader in any investment markets.

This book explained some of the major chart patterns, Fundamental Patterns, Trend Trading Patterns, Range Breakout Patterns, Tips to switch Between the Trends and Ranges in a price action chart. 

You can also have a few strategies such as Trading long or short depending on time-frames and support resistance levels, Trading complex pullbacks, Breakout Trading Strategy, Fake-out Trading Strategy, Strategies with indicators like MACD & moving Averages, and many of the tips and techniques to determine the future price by analyzing the price action charts by becoming a technical analyst in any of the financial investing markets. 

Elliott Wave Principle: A Key to Market Behavior


Elliott Wave Principle: A Key to Market Behavior

Elliott Wave Principle: A Key to Market Behavior

By - A. J. Frost & Robert R Prechter

Pages: 258.  Publisher: New Classics Library.

To learn one of the technical analysis's most powerful tool called Elliot Wave, the book "Elliott Wave Principle: A Key to Market Behavior" by A. J. Frost & Robert Prechter is a master guide to start with. People who started their trading journey for quite a few year must have heard of the term Elliot Wave Theory. Elliot Wave theory is a powerful method to analyze the price action charts to determine the future price movements of a security.

This piece of book is an old one. First edition got published in 1978, while the 11th  edition has been published in 2017. Despite some of the outdated examples which has been given throughout the book, still this is the best book on Elliot Wave charting principles and techniques as the Elliot Wave principle is still valid and can be seen forming even in recent days price action charts.

The book covers all the basics to advanced level concepts of Elliot Wave theory, such as it explained the Corrective Waves, Impulse Waves 1 to 5, Impulse Waves Extensions, Elliot Wave analysis with Fibonacci Ratios, Long term waves, Waves for the stocks and commodity markets, Corrective Waves for Zigzag Flat and Others, Irregular corrections of Waves and so many of the other very important topics on Elliot Wave theory to analyze the price action charts. 

This is a must have book for any technical analysts to perfectly understand the financial market behavior to determine the future price movements and make consistent profit.

Encyclopedia of Chart Patterns


Encyclopedia of Chart Patterns

Encyclopedia of Chart Patterns

By - Thomas N. Bulkowski

Pages: 1032.  Publisher: Wiley.

In a straightforward sentence, if someone would like to have a complete understanding of price action behavior reference with the highest number of statistical result, then this book is a must for them.  

In this giant 1032 pages book named "Encyclopedia of Chart Patterns" by Thomas N. Bulkowski, anyone can find all the answers of the questions behind a price action setup. This is not a book where someone can learn the the basic formation of the price action patterns, rather it's a book that references the validity of a specific price action pattern in certain market situations based on hundreds of tests result of that price action pattern.

The book contains 53 Price Action Patterns with 9 more Event Patterns. Every one of the price action patterns have been explained individually in each of the chapter of this book. In every chapter there's 7 sections containing specific types of information about that pattern in the chapter. 

The 7 sections commonly for all the patterns are the Tour, Identifications Guidelines, Focus on Failures, Statistics, Trading Tactics, Sample Trade, For Best Performance. In Each of the sections, mr Bulkowski has given specific types of information about that pattern. 

For example, In the first chapter the pattern called Broadening Bottoms, where Bulkowski shows the summary result of this pattern at the very beginning of this chapter. Then in the Tour section, he walks through the steps towards explaining the important aspects of that Broadening Bottoms pattern.

Then in the next section called Identifications Guidelines he explained the identification and characteristics of the Broadening Bottoms pattern like Shape, Trend-line, Touches, Volume and others. Then in the next section he explained the Failures case studies of that pattern. Then the next section called Statistics, he gave detailed statistical information of the success rate of that pattern in different market situation like number of Formations for the statistics, Reversal or continuation, Rise or decline, Changes after the trend ends, and many of the different aspects of that pattern from the live market. 

Then in the next section the book gave some Trading Tactics to trade that pattern, following the next section there are some Sample Trade setups can be found with that setup. And then in the next section, Mr Bulkowski has mentioned the Best Performance Guidelines to trade that specific pattern, in this case for our example which is Broadening Bottoms Pattern. 

This is a mastery book for the chart patterns, which should be on anyone's bookshelf who wants to master the price action pattern by reading its potential market behavior by analyzing the previous history of that pattern in different market situation. This is a book that can lift anyone's price action pattern analysis knowledge into the next level. 

A Complete Guide To Volume Price Analysis


A Complete Guide To Volume Price Analysis

A Complete Guide To Volume Price Analysis

By - Anna Coulling

Pages: 180.  Publisher: CreateSpace.

The book "A Complete Guide To Volume Price Analysis" by Anna Coulling is an excellent piece of informational work for those who wants to understand the trade volume behind a price action setup to forecast the potential demand and supply zones based on volume price analysis.

in this 180 pages book, Anna coulling has done a very good job explaining the volume analysis with price action charts. She explained very nicely why the volume is so important as a leading indicator and how it it can improve trade analysis either its a valid or false price action.

The book also shows how to identify a right price movement. Sometimes traders see a price action pattern and triggers trade entries based on that price action pattern without knowing the actual volume level on that specific price zone, which sometimes can be fake price movements and hence the reason to make losses on trades. 

In this book Anna Coulling  also shows how to analyze the trade volumes to get trade confirmation signal where price and volume agrees together, and when to not trade if price does not get match with the volume, and many other tips and techniques to analyze the price action chart with volume to make consistent profit from the investment markets.

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