In trading the financial markets, technical analysis is a method for analyzing price action on a chart to forecast the probability of the future direction of the trend. Technical analysts use charts and the patterns of price data and volume to find key levels of support and resistance along with the path of least direction for buyers and sellers. Much of the behavior of market participants can be explained by behavioral economics and quantitative analysis which have a lot in common with technical analysis.
There are two major schools of technical analysis, one tries to predict the future through current chart patterns, this is predictive technical analysis. The other is reactive technical analysis where buy and sell signals are created based on backtesting, risk/reward ratios through trade management, and principles for capturing trends. One type of technical analysis tries to predict what will happen and the other reacts to what is happening.
Here is a list of ten of the best books on technical analysis for traders that want to learn all the key concepts, principles, and indicators for analyzing and trading price action.
Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications by John Murphy
The Candlestick Course by Steve Nison
Getting Started in Technical Analysis by Jack D. Schwager
The Encyclopedia Of Technical Market Indicators by Robert W. Colby
Encyclopedia of Chart Patterns by Thomas N. Bulkowski
A Complete Guide to the Futures Market: Technical Analysis, Trading Systems, Fundamental Analysis, Options, Spreads, and Trading Principles by Jack Schwager
Technical Analysis Using Multiple Timeframes by Brian Shannon
The Art and Science of Technical Analysis: Market Structure, Price Action, and Trading Strategies by Adam Grimes
Technical Analysis Explained, Fifth Edition: The Successful Investor’s Guide to Spotting Investment Trends and Turning Points by Martin J. Pring
Evidence-Based Technical Analysis : Applying the Scientific Method and Statistical Inference to Trading Signals by David R. Aronson