How Technical Analysis Works (A Review)
A few weeks ago I mentioned that I had checked out a few finance books from the library. Well my checkout period is over now, and since I will be returning my book tomorrow I thought that I would take the time to write a brief review of the book.
I checked out two books, but I only ended up reading one of them. The one I chose to read was called “How Technical Analysis Works” by Bruce M. Kamich. I will admit that i didn’t make it through the whole thing, but I did make it through all of the topics that I was interested in.
In this book, Kamich does an excellent job putting the mysterious world of technical analysis into easy to understand terms that can be useful to both beginning and experienced traders. An experienced trader may want to read something a bit more advanced though.
Coming into this book I knew a little bit about technical analysis like moving averages and certain volume indicators. The book introduced me to a few new strategies that I have already started to use when analyzing different companies. The three strategies that I found most useful were trendlines, triangles, and areas of resistance and support. A few weeks ago I wrote an article about trendlines from what I had read in this book.
One great thing about this book is that Kamich does not simply tell you what a strategy means, but he also tells you how he uses them to trade. I found that to be very useful, because knowing what certain indicators are will only get you so far. Knowing when, where and why to trade is where your success will come from.
For me I found this book very helpful for the advancement of my trading strategies. The important thing to realize is that technical analysis is not the golden ticket to investment success, but is just one of many tools to use when analyzing a company.
Overall, I would highly recommend this book to someone who wants to know more about using technical analysis as an additional trading strategy.
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