Technical Analysis and Chart Interpretations: A Comprehensive Guide to Understanding Established Trading Tactics for Ultimate Profit

Praise for TECHNICAL ANALYSIS AND CHART INTERPRETATIONS

"In Technical Analysis and Chart Interpretations, Ed Ponsi does a tremendous job of breaking down the complex topic of technical analysis so that anyone can understand it, which is why I use his stuff regularly on Mad Money′s Off the Charts segment. Ed′s experience and unique insight allow him to do this without glossing over important nuances. The result is a detailed yet easily understood work that belongs in every investor′s library."
JIM CRAMER, CNBC Anchor, Host of Mad Money on CNBC

"Once again, Ed Ponsi displays his extraordinary depth of knowledge and consummate ability to convey some of the most useful strategies for taking on the financial markets and winning. Very few financial experts have as extensive an understanding of market dynamics and effective trading strategies as Ed Ponsi. This shows through clearly in his new book, Technical Analysis and Chart Interpretations. Much like Ponsi′s previous works, this book is guaranteed to become a go–to standard for both new traders and seasoned professionals alike. If you want or need to understand the most practical technical analysis tools and techniques that can be applied successfully in the financial markets, Technical Analysis and Chart Interpretations is an exceptionally outstanding choice."
JAMES CHEN, CMT, author of Essentials of Technical Analysis for Financial Markets and Essentials of Foreign Exchange Trading; Chartered Market Technician and Chief Technical Strategist, City Index / Gain Capital

"In his latest book, Technical Analysis and Chart Interpretations, Ed Ponsi has nailed the art of creating a ′one–stop–shop′ for all things technical analysis. I was blown away by the sheer volume of analytical techniques, concepts, and candid opinions offered in this all–inclusive and easy–to–read book. I strongly believe Technical Analysis and Chart Interpretations delivers invaluable lessons for traders of all skill levels and sizes. Whether you are a beginner or a pro, this book should be on your shelf!"
CARLEY GARNER, Commodity Broker/Analyst, DeCarleyTrading

"Technical Analysis and Chart Interpretations is the full package for any trader or investor. Ed′s view of technical analysis is brilliant and easy to follow. There are so few offerings of a ′soup to nuts′ education on charting but this book is a must in every trader′s book collection. It is rare to find a book on technicals that methodically takes you through the steps of successful interpretation. After reading Ed′s book you will certainly find yourself on your way to becoming a successful chart reader."
BOB LANG, Chief Strategist, explosiveoptions.net

"A must read for investors! Ed Ponsi convinced many CNBC viewers that profits are found in the trends, not the fundamentals. This book will convert many more."
LISA OAKE, Founder and CEO, Oake Media; Former CNBC Asia Anchor

"Ed Ponsi walks you through the key concepts of technical analysis, giving you what you need to know in an easy–to–follow format. If you want to learn to trade with technical analysis, this is the book for you."
DAVID STENDAHL, President, Signal Trading Group

Introduction: The Journey xi

About the Author xv

PART I THE FOUNDATION OF TECHNICAL ANALYSIS 1

Chapter 1 Why Technical Analysis? 3

Chapter 2 The Language of Trading 9

Chapter 3 The Cornerstone 15

Chapter 4 The Dow Theory 19

PART II KEY CONCEPTS OF TECHNICAL ANALYSIS 27

Chapter 5 Common Types of Charts 29

Chapter 6 Support and Resistance 39

Chapter 7 Trends and Trend Lines 51

Chapter 8 Volume 61

Chapter 9 Gaps 77

PART III PRICE PATTERNS 93

Chapter 10 Reversal Chart Patterns 95

Chapter 11 Continuation Patterns 117

Chapter 12 Additional Chart Patterns 133

PART IV CANDLESTICK PATTERNS 141

Chapter 13 Candlestick Charting Patterns 143

Chapter 14 Continuation and Indecision Candlestick Patterns 169

PART V FIBONACCI 181

Chapter 15 Fibonacci Trading Techniques 183

PART VI TECHNICAL INDICATORS 199

Chapter 16 Moving Averages 201

Chapter 17 Moving Average Envelopes and Bollinger Bands 215

Chapter 18 Oscillators 223

Chapter 19 Average True Range (ATR) 243

Chapter 20 Complex Indicators 253

PART VII OSCILLATORS 259

Chapter 21 Point and Figure Charting 261

PART VIII ATR, ADX, AND PSAR 285

Chapter 22 Cycles and Tendencies 287

PART IX CYCLES 305

Chapter 23 Sentiment Indicators 307

PART X POINT AND FIGURE CHARTING 321

Chapter 24 Psychological Aspects of Technical Analysis 323

Chapter 25 Understanding Bubbles 333

Chapter 26 Trading versus Reality 339

PART XI ODDS AND ENDS 347

Chapter 27 Unconventional Patterns 349

Chapter 28 Combining Technical and Fundamental Analysis 353

PART XII BEHAVIORAL ASPECTS OF TECHNICAL ANALYSIS 359

Chapter 29 Final Thoughts on Technical Analysis 361

Index 363

ED PONSI is the managing director of Barchetta Capital Management LLC. An experienced professional trader and money manager, Mr. Ponsi has advised hedge funds, institutional traders, and individuals of all levels of skill and experience. He has made hundreds of appearances on national and international networks such as CNN, CNBC, the BBC, and Bloomberg. A dynamic public speaker, Mr. Ponsi has lectured audiences around the world, in locations such as London, Singapore, and New York City.