Technical analysis is a method for analyzing price action on a chart to forecast the probability of the future direction of momentum for trading the financial markets. Technical analysts quantify the patterns price data and volume create on charts to find key levels of support and resistance along with the path of least direction for entries and for timing the most optimal exits. Much of the behavior of buyers and sellers in the markets can be explained by behavioral economics and quantitative analysis which have a lot of parallels with the art and science of technical analysis.
There are two major schools of thought and practice in technical analysis, one tries to predict the future through current chart patterns and is predictive technical analysis. The other is reactive technical analysis where buy and sell signals are created based on backtesting, risk/reward ratios and through live trade management that express profitable principles for creating small losses and big wins. The first type of technical analysis tries to predict what will happen in the future and the other reacts to what is happening now.
Here is a list of many of the best books on technical analysis for traders that want to learn the key concepts, principles, and indicators for analyzing and trading price action for profits.
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 by Martin J. Pring
Evidence-Based Technical Analysis : Applying the Scientific Method and Statistical Inference to Trading Signals by David R. Aronson
My books:
The Ultimate Guide to Technical Analysis by Steve Burns
The Ultimate Guide to Chart Patterns by Steve Burns
The Ultimate Guide to Candlestick Chart Patterns by Steve Burns
