The 7 Best Technical Analysis Books

Many people who invest for the long term look at current trends to indicate whether it is a good time to buy or sell an asset. For example, if a company has a strong quarterly financial report, its shares are likely to appreciate in value.

However, there is an approach that is more popular in short-term trading called technical analysis. This approach is based on the idea that history repeats itself, so if a company’s stock has followed a certain trend in the past, it is likely to do so again. By looking at historical data, you can determine how the stock will perform in the future. Technical analysis is popular with swing trading (where you trade every few days, weeks or months) and with the terribly risky strategy of day trading, or buying and selling a stock all in the same day.

Some people prefer both methods of trading: looking at technical analysis and current trends (fundamental analysis).

Technical analysis can be a difficult strategy to understand, especially if you want to master it well enough to engage in swing or day trading, which can bring big gains as well as big losses. We do not recommend technical analysis for everyone as it is difficult enough to understand to see significant gains. But if you want to get started, here are some of the best books to help you understand technical analysis for trading.

Best for Beginners: “Getting Started in Technical Analysis” by Jack Schwager

Schwager divides this book into four main sections: basic analysis tools, trading issues, trading systems, and practical trading guidelines. By the time you finish reading, you should have a solid understanding of the basic concepts of technical analysis.

The book covers important parts of technical analysis, such as chart patterns, when to enter and exit an asset, what software to use, and how to set up stop-loss orders. Schwager also has a chapter on 82 rules and observations about the stock market, which is useful for any beginner.

Best for Beginners, Runner-Up: “Technical Analysis from A to Z” by Steven B Achelis

The first part of “Technical Analysis from A to Z” teaches you the basics of technical analysis, including an in-depth explanation of what it is and how it works. It also walks you through several popular types of charts used in technical analysis and strategies such as support and resistance triggers.

The second part is a comprehensive glossary of terms you should know. Technical analysis is a complex subject, so this glossary is a great reference for both a novice learner and those ready to move into actual trading.

Let’s say you understand how technical analysis works and some of the most popular charts and strategies. Now you may be ready to dive into even more complex topics.

Murphy’s book starts with basic information, such as the concept of a trend and chart. He then moves on to topics such as major reversal patterns, continuation patterns, and long-term charts. If you are not familiar with these terms, this can be a good book to take your understanding to the next level.

Best for a comprehensive overview: “Technical Analysis Explained” by Martin Pring

“Technical Analysis Explained” covers a variety of technical analysis topics, and by the time you’re done reading, you should have a fairly comprehensive understanding of everything that goes into it.

Pring starts with the basics, such as the definitions of trends and basic patterns. He then goes into more detail about the ins and outs of the market – because to use technical analysis successfully, you already need to have a good understanding of how the stock market works. Technical analysis, along with day and swing trading, are not for those new to the stock market. Pring also covers larger topics such as the psychology of trading and how interest rates affect the market.

Best to learn about patterns: “Encyclopedia of Chart Patterns” by Thomas Bulkowski

There are plenty of chart patterns you can use in technical analysis. These patterns show how a stock (or other asset) has performed repeatedly in the past – and according to technical analysis, the asset is likely to perform this way again.

Bulkowski starts by explaining how to trade by looking at chart patterns, then dives into over 70 patterns that you can use to determine when to buy and sell an asset based on technical analysis. This level of detail can help you choose the few patterns to use when trading.

Best to learn about candlestick charts: “Japanese Candlestick Charting Techniques” by Steve Nison

While “Encyclopedia of Chart Patterns” covers dozens of charts in technical analysis, this book focuses on one important, popular one: candlestick charts. A candlestick chart shows the movement of an asset by looking at four points: the opening price, closing price, low price and high price. Together, these four dots vertically on a map loosely form the shape of a candle.

There are multiple types of candlestick patterns that can help you predict how an asset will perform in the future. This book goes through the history and importance of candlestick charts, then explains each of the pattern types.

Best for Hands-on Experience: “Technical Analysis of Stock Trends” by Robert D. Edwards, John Magee

“Technical Analysis of Stock Trends” covers many of the same topics as our other top picks: charts, reversals, and trends, to name a few. But it also has sections meant to help you decide what to do with your money when you’re ready to actually get started.

For example, you will read how to choose stocks, how to diversify your choices and how to decide how much money to put in the market.

Other Technical Analysis Books We Considered

Frequently Asked Questions

What is technical analysis?

Technical analysis is a strategy for trading stocks and other assets. You look at historical chart patterns to determine how the asset will perform in the future, which can help you decide when to buy or sell the asset.

This is in contrast to fundamental analysis, which looks at a company’s current financial situation to determine whether it is a good time to buy or sell.

Does technical analysis work?

Yes, technical analysis generally works – if you have a deep understanding of the stock market, have done your research and know what chart patterns to use. Technical analysis probably won’t work for novice investors because it’s a complicated concept with a lot of moving parts.

Technical analysis is definitely not for everyone, and to make it work, you really need to know your stuff.

Does Warren Buffett Use Technical Analysis?

No, Warren Buffett does not use technical analysis when he invests. Buffett looks at a company’s current financial situation and chooses to invest in companies that he believes have strong earning potential.

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