I recently finished reading Connie Brown's 2nd edition of Technical Analysis for the Trading Professional. This book is a valuable update to the innovative ideas put forth in the first edition. The format and content has remained true to the original but she has taken the opportunity to reveal to the reader additional lessons learned. For instance, she has a great deal of new charts with recent data and relevant examples. When I began to work in the business I asked an experienced trader what books I should read. Connie's professional book was his first suggestion. I read the first edition of this book at least six times over the course of three years of intensive study and growth. I would focus on a particular subject (oscillators) then move to another (Elliott wave theory), move to another (point & figure) and then I would eventually work back to Connie's Professional book. Each time I found pertinent information that I had previously missed. This updated version is no different...just improved and more relevant to today's volatility. There is a reason this is required reading for CMTs.
This book is part of the CMT required reading and the title claims it is for the "trading professional". I do not doubt that one bit. This is not a system on trading strategies or a broad review of technical analysis so much as a rethink on the traditionally accepted methods.
Being an intermediate level trader, I found this material a bit on the complex side. I prefer a simple method and system to technical analysis and this goes beyond the KISS method for sure. Some interesting ideas about trendlines, oscillators, fibonnaci, etc...and I would say they are definitely outside of the box or innovative approaches.
If you're a beginner, reading this will scare you away from technical analysis.
If you're intermediate, reading this will have you looking for a simpler approach.
If you're advanced, reading this might help you develop a greater edge...but its not a complete system.
What did I do with the book?
Returned it after reading and skimming...coming to the conclusions mentioned here.
I gave it 3 stars for the innovative approaches and thoroughness of analysis, but I wish the amazon ratings could be scaled based on skill level. In that case its a 1 star for beginners and a 2 star for intermediates simply on the ease of application.
The author believes that the markets are fluid and constantly changing because they are centered on human emotions. For this reason, the use of a single technical indicator in trading is often subject to a more than fifty percent failure rate. The author postulates that human emotion alternates between fear and greed resulting in market prices alternating between an impulsive or buying phase where greed prevails and a corrective phase where fear dominates. These impulses manifest themselves in waves due to a herd mentality and are best described using the Elliott wave model.
In an uptrend, waves 1, 3 and 5 are impulse waves interrupted by corrective waves 2 and 4 which are smaller retraces of waves 1 and 3. In addition the corrective waves are subdivided into three smaller degree waves beginning with a five wave countertrend impulse (buy)followed by a retrace (sell) and another impulse (buy). This description shows how challenging counting waves accurately is likely to be for a beginner.
This book distinguishes itself by using a combination of technical indicators to show Elliott wave patterns more clearly. The use of oscillators in combination with Elliott waves can more clearly show the beginning and end of each wave. While this is still challenging, it makes the application of Elliott waves much easier as I've experienced in my own trading.
The book also touches on other topics including, Composite Index, Gann Studies, price projections, trend lines, and trading cycles in addition to Elliott waves and oscillators discussed above.
The usefulness of this book lies in its ability to help the trader navigate the complexity of the markets. As an example, trends are revealed by using multiple indicators allowing the trader to see where a trend continues and ends.
In summary, this is a book for the more advanced trader, and a beginner is likely to struggle to understand the content. It's required that a reader has a basic understanding of most indicators used. Aside from that consideration, the book does give new trading ideas, but it's up to the reader to make the effort to apply them.
This book is exactly what is says on the cover. Technical Analysis for the Trading Professional. If you are not already heavily invested into technical analysis with at least a couple of years experience, then this book is not for you. I bought this book ignoring the "Professional" part of the title, and because of that I am disappointed. I've read through about 25% of the book in the past few days, to page 105 and I've taken away to good lessons from the entire thing on charting your Stochastics as to not be part of the Stochastic Default Club, and the cycle periods on a chart to calculate price swings, as well as drawing out trend lines to determine when prices are likely to make market changes. Other than that, I feel like I am reading jibberish and merely reading without comprehension. Because of this, I'm not returning the book, and I'm awarding 4 stars because it is so well written and filled with useful information, but never the less it will sit on my book shelf for the next year or two until I've driven further into technical analysis, Fibonacci, Gann, and other in-depth versions of analysis. The bottom line is it's a great book if you are experienced with the terms I've mentioned, and their forms of analysis, otherwise it is definitely a book for the CMT and no more.
Product Details :
Hardcover: 464 pages
Publisher: McGraw-Hill; 2 edition (December 20, 2011)
Language: English
ISBN-10: 007175914X
ISBN-13: 978-0071759144
Product Dimensions: 6.2 x 1.5 x 9.5 inches
More Details about Technical Analysis for the Trading Professional, 2nd edition: Strategies and Techniques for Today’s Turbulent Global Financial Markets
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