The Classic Introduction to Technical Analysis--Fully Updated and Revised! The most reliable method for forecasting trends and timing market turns, technical analysis is as close to a "scientific" trading approach as you can get―and it is particularly valuable in today's volatile markets. The Technical Analysis Course , Fourth Edition, provides the know-how you need to make this powerful tool part of your overall investing strategy. Through a series of lessons and exams, you'll master the techniques used by the most successful technical analysts in the market today. Updated with hundreds of real market examples, The Technical Analysis Course provides the essential foundation for using time-tested technical analysis techniques to profit from the markets. You'll learn how to: Identify profitable chart patterns, including reversals, consolidation formations, and gaps - Utilize key analytical tools, including trendlines and channels, support and resistance, relative strength analysis, and volume and open interest - Perform advanced analysis using moving averages, trading bands, Bollinger Bands, oscillators, the Relative Strength Index, stochastics, and moving average convergence-divergence - Purchase stocks, bonds, futures, and options when prices are near their bottoms and sell when prices are close to their highs Critical Acclaim for THE TECHNICAL ANALYSIS COURSE "If you are a neophyte in the markets, this may be the book for you. It won't turn you into an overnight market wizard. You will, however, acquire an excellent grasp of market terminology and be a step ahead toward trading success and fortune." -- Technical Analysis of Stocks & Commodities Thomas A. Meyers, CPA, CFA , CPCU , was senior vice president and chief financial officer of a large insurance company, where he was responsible for the management of billions of dollars of investments. He has written more than 100 articles on investing and technical analysis and coauthored the first edition of The Encyclopedia of Technical Market Indicators . Thomas A. Meyers, CPA, CFA , CPCU , was senior vice president and chief financial officer of a large insurance company, where he was responsible for the management of billions of dollars of investments. He has written more than 100 articles on investing and technical analysis and coauthored the first edition of The Encyclopedia of Technical Market Indicators . THE TECHNICAL ANALYSIS COURSE LEARN HOW TO FORECAST AND TIME THE MARKET By THOMAS A. MEYERS The McGraw-Hill Companies, Inc. Copyright © 2011 Thomas A. Meyers All rights reserved. ISBN: 978-0-07-174902-2 Contents FINAL EXAMHOW TO TAKE THIS COURSEINTRODUCTIONLESSON 1 The Philosophy of Technical AnalysisCONSTRUCTING CHARTSLESSON 2 Basic Chart ConstructionPROFITABLE CHART PATTERNSLESSON 3 Major Reversal Chart PatternsLESSON 4 Consolidation FormationsLESSON 5 GapsEXAM 1 KEY ANALYTICAL TOOLSLESSON 6 Trendlines and ChannelsLESSON 7 Support and ResistanceLESSON 8 The True Value of Failed SignalsLESSON 9 Relative Strength AnalysisLESSON 10 Volume and Open InterestEXAM 2 ADVANCED ANALYSISLESSON 11 Using Moving AveragesLESSON 12 Trading Bands and Bollinger BandsLESSON 13 Confirmation and DivergenceLESSON 14 OscillatorsLESSON 15 Relative Strength IndexLESSON 16 StochasticsLESSON 17 Moving Average Convergence-DivergenceEXAM 3 PUTTING IT ALL TOGETHERLESSON 18 A Structured Approach to Technical AnalysisLESSON 19 A Case StudyAPPENDIX A Alternative Charting MethodsAPPENDIX B Recommended Technical Analysis BooksAPPENDIX C GlossaryAPPENDIX D Answers to ExamsINDEX Excerpt CHAPTER 1 LESSON 1The Philosophy of Technical Analysis Those in the know on Wall Street have increasingly turned to technical analysisin recent years. They realize that security prices do not move randomly; ratherthey move in repeating and identifiable patterns. They use this information togain an edge on other investors and make money in the stock market. This coursewill enable others to do the same by making profitable investment decisionsbased on proven technical analysis techniques. THE BASIC PRINCIPLES Before learning about the specific tools and techniques the technician (onewho employs technical analysis) uses to analyze various investmentopportunities, it is essential that one understand the principles upon whichtechnical analysis is based. The three key principles are: 1. Everything is discounted and reflected in market prices. 2. Prices move in trends, and trends persist. 3. Market action is repetitive. Let's examine each principle in detail. The first and most important principleis that everything is discounted and reflected in market prices. The technicianbelieves that all knowledge, regardless of type (fundamental, economic,political, psychological, or other), is already reflected and discounted inmarket prices. Technicians, unlike fundamental analysts, feel that it is futileto study company financial statements, earnings and dividend report