Jack Schwager. Technical Analysis, Study Guide | mt5.com

Jack Schwager. Technical Analysis, Study Guide
Jack Schwager. Technical Analysis, Study Guide

Chart analysis ranks high among different types of technical analysis used by traders worldwide in their own trading systems. Technical analysts favour it for its simplicity, clarity, and reliability which can be achieved when using models and patterns essential for this type of analysis.

The book Technical Analysis, Study Guide by Jack Schwager, a famous guru of financial markets, is devoted to the issues of chart analysis on futures markets. Traders will enjoy reading the book because it is written, unlike encyclopedia on technical analysis, in insightful and nontechnical style as the author pays the outmost attention to the chart patterns which help him to build the logical chain “model-application-result”. The chapters that dwell upon oscillators and candlestick analysis are written together with other technical analysts (Steve Nison, Thomas Borowitz) to broaden the reader’s view on the methods of financial analysis. However, the issues covered in these chapters can hardly be the aim of the book.

The first section is devoted to the price charts: patterns of chart analysis, methods of price trends determination, and chart types. Chapter 12 is very important as here the author touches upon both conventional nearest and continuous futures contract charts. This section can be called “classic” as information about analysis patterns, their use in trading, pitfalls, and methods of profit maximization is very detailed and presented from the position of practical use of this or that trading aspect.

The second section contains just one chapter named Real-World Chart Analysis where the author explores the practical use of trading models in the real world of trading for different assets of financial markets. This part of the book is vital to consolidate the knowledge and understand the author’s view on the use of this or that pattern of the chart analysis.

The third section covers oscillators in technical analysis and futures markets cycle theory.

Finally, the fourth section raises a crucial issue – the creation and optimization of trading systems. The section may be useful for those who want to get acquainted with the system factor of trading in general. It should be noted that the book focuses on technical analysis - for this reason all the accompanying questions are covered solely from this point of view. Thus, such approach makes the book more specialized; however it is much better to precisely investigate the principles of one approach rather than give a brief description of all of them.

The book can be difficult to understand for a layman as the information provided can be easily assimilated only by an experienced analyst. Chapter 23 named Eighty-Two Trading Rules and Market Observations can serve as an obvious example for this. These rules embrace a great variety of questions ranging from the urgency of model application to money management. To study this part of the book in-depth, it is necessary to get familiar with the guidelines of technical analysis, in particular, with their practical use.

Nevertheless, the book can be recommended to both analysts and technical traders who believe in chart analysis potential on commodity markets. The history proves that this type of analysis showed excellent results in the past and still does in the present when properly applied which can be learnt from Technical Analysis, Study Guide by Jack Schwager.

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