Magazine article Modern Trader

Mastering Technical Analysis

Magazine article Modern Trader

Mastering Technical Analysis

Article excerpt

Mastering Technical Analysis Bg MichaeL C. Thomsett Dearborn Publishing (1999) 252 pages, $27.00

Reviewed by Diane Krueger

"Technical analysis is not so complicated that most people can't make good use of it. By simply defining your terms and defining a limited number of indicators of greatest value to you, it is possible to devise an intelligent strategy. "

- Michael C. Thomsett

For those new to trading or for those even moderately interested in trading, Mastering Technical Analysis is a good book for getting acquainted with technical analysis. It gives readers a basic understanding of technical strategies to trade with, even though the title is, well, quite an overstatement.

Don't put all your egg: in one basket. Those eight words best summarize the entire book. The importance of not relying on only one method of analysis is mentioned frequently. Particularly, in the chapter "Valuable Indicators You Can Use," Thomsett provides descriptions of various technical analysis indicators and often reiterates the common mistakes of using such indicators in general, such as relying on just one tool or using a group of indicators that measure the same thing. Instead, he suggests using confirming technical indicators as well as some sentiment indicators and fundamental analysis.

Whether you're trading professionally or recreationally, you should know your trading style and find the indicators that best mesh with that approach. Different people use different indicators. You shouldn't use a particular indicator because it works well for a friend. The book stresses the significance of selecting an indicator that will work best for you.

The book also does a good job of describing the different types of chart patterns and how to use them. Patterns such as head and shoulders, tops and bottoms and triangles are just a few that are discussed in the chapter "Charting Basics. …

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