Recommended Reading 03-27-2014

Readers repeatedly ask me for book and article recommendations, especially new traders who are interested in learning more about trading and investing.  Education is the single most important prerequisite for trading success.  Look for periodic posts with my  personal recommendations for books, articles, and other educational resources. A complete list of all past recommendations is available on the Recommended Reading page.

Brian Johnson's Recommendation

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

by John J. Murphy

This may be the best single resource book on technical analysis.  It assumes no prior knowledge of technical analysis and provides a comprehensive look at many of the popular tools used by market technicians.  It is one of the first books I purchased when I began learning about technical tools and I highlighted or dog-eared nearly every page for future reference.  I continue to be fascinated by the potential of technical indicators and this book provided the inspiration for much of my own proprietary research work.

John J. Murphy Amazon Biography

"John J. Murphy is a former technical analyst for CNBC and has over forty years of market experience. He is the face of StockCharts.com, which provides financial information to online investors via technical analysis tools. Murphy has appeared on Bloomberg TV, CNN's Moneyline, Nightly Business Report, and Wall $treet Week with Louis Rukeyser. In 1992, he was given the first award for outstanding contribution to global technical analysis by the International Federation of Technical Analysts, and was the recipient of the 2002 Market Technicians Association Annual Award. In addition to the First Edition of The Visual Investor, he is also author of Intermarket Technical Analysis and Intermarket Analysis, all of which are published by Wiley. He also authored Technical Analysis of the Financial Markets. Murphy has a bachelor of arts in economics and a master of business administration from Fordham University."

Conclusion

I personally believe that every investor should become proficient in technical analysis, even those who primarily use fundamental analysis in their investment process.  Fundamental screening strategies or ranking services may help you identify what to buy or sell, but only technical analysis can help you determine the optimal times to buy and sell.  Technical Analysis of the Financial Markets is one of the bestselling books on technical analysis, written by one of the leading practitioners in the field.

Disclosure: Trading Insights, LLC has an affiliate referral relationship with Amazon.

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About Brian Johnson

I have been an investment professional for over 30 years. I worked as a fixed income portfolio manager, personally managing over $13 billion in assets for institutional clients. I was also the President of a financial consulting and software development firm, developing artificial intelligence based forecasting and risk management systems for institutional investment managers. I am now a full-time proprietary trader in options, futures, stocks, and ETFs using both algorithmic and discretionary trading strategies. In addition to my professional investment experience, I designed and taught courses in financial derivatives for both MBA and undergraduate business programs on a part-time basis for a number of years.
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