Preface xiii Acknowledgments xvii 1 Introduction to Technical Analysis: Pursuing Profit in the Financial Markets 1 What Is Technical Analysis? 2 Technical versus Fundamental 2 Methods 5 What to Expect 5 Summary 9 2 The Story of Technical Analysis: From the Japanese Rice Markets to Dow Theory to Automated Trading 11 The Beginning: Japanese Rice Markets 12 Dow Theory 14 Charting 17 Elliott Wave 18 W. D. Gann 20 Indicators 20 Trend Followers 22 Market Technicians Association 23 Technical Analysis Today 23 Summary 24 3 The Power of Technical Analysis: Principles of Price Action 27 Introduction to Price Action Concepts 28 Components of Price Action 29 Summary 32 4 The Basics of Technical Analysis: Bars, Candlesticks, Lines, and Point and Figure 33 Bars and Candlesticks 34 Line Charts 37 Point-and-Figure Charts 38 Summary 40 5 The Heart of Technical Analysis: Uptrends and Downtrends 41 Introduction to Trend 42 Effect of Time Frames on Trend Determination 50 Parallel Trend Channels 52 Trend Lines 54 Summary 55 6 The Soul of Technical Analysis: Support and Resistance 57 Introduction to Support and Resistance 58 Support Becomes Resistance Becomes Support 60 Summary 64 7 Primary Drawing Tools: Trend Lines, Trend Channels, and Horizontal Support and Resistance 65 Introduction to Drawing Tools 66 Static Support and Resistance 67 Dynamic Support and Resistance 72 Horizontal Support and Resistance Lines 78 Trend Lines 81 Parallel Trend Channels 87 Summary 89 8 Chart Patterns: Bar Shapes and Candlestick Formations 91 Introduction to Chart Patterns 91 Continuation Bar Patterns 93 Reversal Bar Patterns 102 Gaps 106 Candlestick Patterns 110 Single-Candle Patterns 111 Multiple-Candle Patterns 116 Summary 118 9 The World of Moving Averages 119 Introduction to Moving Averages 119 Moving Average Crossovers 123 Moving Averages as Support and Resistance 131 Summary 134 10 Key Technical Indicators and Oscillators 135 Introduction to Indicators and Oscillators 135 Key Indicators 139 Key Oscillators 148 Summary 159 11 Fibonacci and Elliott Wave 161 Fibonacci Theory and Methods 161 Elliott Wave Theory 170 Summary 175 12 Point-and-Figure Charting 177 Introduction to Point and Figure 177 Point-and-Figure Patterns 181 Point-and-Figure Price Targets 188 Summary 190 13 Volume 193 Introduction to Volume 193 On-Balance Volume 196 Tick Volume 198 Summary 199 14 Technical Trading Strategies: Practical Applications 201 Introduction to Technical Trading Strategies 202 Moving Average Crossovers 203 Breakout Trading 212 Trend Trading 224 Range Trading 238 Price-Oscillator Divergences 244 Oscillator Trading 249 Fibonacci Trading 254 Positive Expectancy 256 Summary 258 15 Risk Control and Money Management 261 Introduction to Risk Control and Money Management 262 Stop-Losses 263 Reward:Risk Ratio 266 Maximum Allowable Loss 269 Multiple Fractional Positions 271 Diversification 273 Summary 273 Index 277.