Best technical analysis books 2021
Technical analysis is one of the most important trader tools out there. This is especially true for crypto trading, as fundamental analysis of crypto assets is usually much more difficult and unreliable than that of traditional assets.
For this reason, it's important for crypto traders to improve their technical analysis skills. Even for investors, knowledge of technical analysis is useful for making investment decisions. There are different ways to learn technical analysis: seminars, video tutorials, articles, private tuition, and, of course, books. In this article, we have described a selection of the best charting and technical analysis books that have been released so far.
Best technical analysis books for beginners
Getting Started in Technical Analysis by Jack Schwager
This book is considered by many to be a good first read for anyone looking to learn technical analysis. Written by a recognised expert in trading and technical analysis, Getting Start in Technical Analysis is full of examples, and its simple explanations make it easy to understand. Since the book is meant for novice traders, it will only teach the basics of technical analysis, but these basics will serve as a solid footing for further study of the subject. The disadvantage of the book is the use of bar charts by the author, which are sometimes difficult to read clearly.
Technical Analysis of the Financial Markets by John J. Murphy
The book is widely considered to be one of the best books on technical analysis. Despite the fact that the text is not always easy for a beginner to understand, the book is nevertheless designed for beginner and intermediate readers. It's over 500 pages long and covers in detail a variety of topics, from the philosophy of technical analysis and Dow theory to trading tactics and the rules of building a trading system. Although the book is devoted to the technical analysis of traditional financial instruments such as stocks and futures, crypto traders will also find a lot of useful information in it.
Secrets For Profiting in Bull and Bear Markets by Stan Weinstein
This is a classic work on technical analysis, written using easy-to-understand language. The book is quite old. It was first published in 1988 in the pre-Internet era, so it's partially outdated. We can't recommend it as the first book on technical analysis, but it can be very helpful for a beginner in conjunction with the other books mentioned here.
Master the Markets by Tom Williams
This book is suitable for beginners who already know the basics of technical analysis. The book describes the basics of the Volume Spread Analysis (VSA) system, a method for analysing trading volume in combination with the size and shape of a candlestick. Nevertheless, it offers useful advice for any trader, regardless of whether they use this system or not. The book considers the market not in terms of patterns and algorithms but as an interaction and confrontation between buyers and sellers. It teaches you to read charts taking into account context to understand what is happening in the market in general and not just thoughtlessly memorise trading setups. The main disadvantage of the book is the intrusive advertising of the Tradeguider programme.
Auxiliary book for beginners
To Trade or Not to Trade: A Beginner's Guide by Dr Alexander Elder
Trading is the hardest way to make an easy dollar.— Alexander Elder, To Trade or Not to Trade: A Beginner's Guide.
Unlike the rest of the books listed in this article, this book is not about technical analysis per se. However, this book is worth reading before you start studying technical analysis. This short, easy-to-understand book is a great intro for anyone looking to try their hand at trading. Moreover, even those who already have some trading experience may find it useful.
The book covers the essential fundamentals of trading, including the psychology of trading, its rules and money management.
When reading, however, it should be borne in mind that the book was written about trading in traditional financial markets. The crypto market has its own differences, in particular, a much lower entry threshold than indicated in the book.
Books on candlestick patterns
Japanese Candlestick Charting Techniques, Second Edition by Steve Nison
This is one of the most popular books on candlestick patterns. The book details candlestick patterns themselves and how to use them with trend lines and indicators such as Moving Averages, RSI and MACD for chart analysis. Since candlestick charts are the most common type of charts in modern technical analysis, this book is recommended for all traders, both novice and experienced, regardless of what asset class they trade.
How to Make Money Trading with Candlestick Charts by Balkrishna M. Sadekar
This is a solid book on candlestick charts. It describes candlestick patterns, combining candlesticks with technical analysis and trading setups based on candlestick patterns. The book is intended for beginner- to intermediate-level traders.
Chart pattern analysis book
Encyclopedia of Chart Patterns, Second Edition by Thomas N. Bulkowski
This is an extensive and well-organised reference book of chart patterns. This 1000-page work contains a detailed description of 63 chart patterns. For each pattern, there are identification guidelines, statistics, trading tactics and a sample trade. Descriptions are accompanied by real-life examples. This book is useful for any trader, although it's aimed at those who already have some experience in trading.
Advanced technical analysis books
Two Roads Diverged: Trading Divergences by Dr Alexander Elder
This book is devoted to trading using divergences (disagreements between indicators and prices), which the author considers the most reliable signal of a trend reversal. The book is short, written in easy-to-understand language and contains many examples.
Ichimoku Charting & Technical Analysis by Charles G. Koonitz
The Ichimoku Cloud is an indicator that is not widely used among Western traders. It's not easy to master, but it can be a very helpful tool for those who have been able to master it. This book is considered one of the best and most understandable tutorials on this indicator. Despite the fact that the author positions his book as a guide for beginners, it's still best to start reading it if you're already familiar with technical analysis.