Book Summary: Charting and Technical Analysis by Fred McAllen

Charting and Technical Analysis by Fred McAllen

Main Themes:

• The importance of technical analysis for all investors and traders: The book emphasizes that understanding price and market movements through technical analysis is crucial for success in any market, including stocks, options, forex, and mutual funds.
• Self-reliance in investment decisions: McAllen advocates for investors to learn technical analysis and make their own decisions rather than depending on financial advisors who may have conflicting interests.
• Identifying market trends and entry/exit points: The book provides in-depth knowledge on recognizing market tops and bottoms, entry and exit points, and understanding the forces driving buying and selling activity.

Most Important Ideas/Facts:

• Market Tops: "Market tops form after a long advance. The market seems to get tired and stops advancing and begins moving sideways." (Popular highlight)
• Hammer Candlestick Pattern: "The Hammer is normally found at the bottom and forms when a stock has been in a downtrend and finally reached a support level." (Popular highlight)
• Identifying the Primary Trend: "After you first determine the primary trend, and it is advancing, then you can wait for a pullback (secondary trend) to buy your investment." (Popular highlight)
• Hanging Man Candlestick Pattern: "The Hanging Man is a bearish candlestick pattern that forms at the end of an uptrend." (Popular highlight)
• Author's Background: Fred McAllen is a former stockbroker, financial advisor, and portfolio manager with 25 years of experience. He aims to help average investors through his writing.

Key Takeaways:

• "Charting and Technical Analysis" is positioned as a comprehensive guide for investors and traders of all levels.
• The book focuses on empowering readers to understand market dynamics and make informed investment decisions independently.
• McAllen uses clear language and practical examples to explain complex concepts, making technical analysis accessible to a wider audience.
• Customer reviews suggest the book is well-structured, easy to understand, and provides valuable insights for improving trading profits.

Quotes:

• "This book is not just another creative way to tell you to 'Buy Low and Sell High!'"
• "It is IN-DEPTH, EXPLAINED, and you WILL learn price movements and technical analysis and how to apply that knowledge to individual stocks and the overall market as well."
• "You Should NEVER attempt Trading or Investing without it. And NEVER depend upon a Financial Advisor to make your decisions. They are salespeople and they make money whether you do or not."

Overall Impression:

"Charting and Technical Analysis" by Fred McAllen appears to be a valuable resource for individuals seeking to learn and apply technical analysis in their investment strategies. The book promotes self-sufficiency and aims to equip readers with the knowledge and tools necessary to navigate the financial markets confidently.

Charting and Technical Analysis FAQ

1. What is the main idea behind "Charting and Technical Analysis"?

This book emphasizes the importance of technical analysis for all investors and traders, regardless of their chosen market (stocks, options, forex, etc.). It argues that understanding price movements and market trends through technical analysis is crucial for success, and that relying solely on financial advisors can be detrimental.

2. What will readers gain from reading "Charting and Technical Analysis"?

The book promises to provide readers with an in-depth understanding of technical analysis and its application. It aims to teach readers how to identify market trends, recognize entry and exit points, and understand the motivations behind buying and selling activity. This knowledge will help readers make informed investment decisions and potentially improve their profits.

3. Does the book simply reiterate the common advice to "buy low, sell high"?

No, the book goes beyond this oversimplified advice. It delves into the complexities of price movements, technical indicators, and market psychology, providing a more nuanced and practical approach to investing.

4. What are some key concepts highlighted by readers in "Charting and Technical Analysis"?

Readers have highlighted the importance of identifying market tops after extended advances, recognizing bullish "Hammer" patterns at potential market bottoms, understanding the significance of buying during pullbacks in an uptrend, and being aware of bearish "Hanging Man" patterns that signal potential trend reversals.

5. Who is the author of "Charting and Technical Analysis"?

The author, Fred McAllen, is a former stockbroker, financial advisor, and portfolio manager with over 25 years of experience in the financial industry. He has written several books aimed at helping average investors understand financial markets and make informed decisions.

6. Is "Charting and Technical Analysis" suitable for beginners?

Based on customer reviews, the book is considered concise and easy to understand, making it suitable for beginners in technical analysis. It covers both basic and more advanced topics, providing a solid foundation for understanding market trends and making informed investment decisions.

7. What format is the book available in?

"Charting and Technical Analysis" is available in several formats, including Kindle Edition, Hardcover, and Paperback.

8. What is the general feedback from readers about the book?

Readers generally praise the book for its clarity, conciseness, and practical approach. They find it easy to understand, valuable for beginners, and helpful in improving their trading profits. Some criticisms include the print quality of certain editions and the fact that the content might be considered "intermediate level" rather than truly introductory.