Forum Archive Index - November 2001

[Phaedrus <Phaedrus@techemail.com>]

 The following is a possible agenda for anyone wanting to learn about Technical 
Analysis. It is not suggested that you need to do everything here in order to 
use TA effectively. Take it as far as you wish. Where applicable, some 
approximate indication of cost is given.

 What is Technical Analysis, and why use it?   
http://www.ataa.com.au/a_cn_ta.htm

 An Introduction to basic Technical Analysis :- 
http://wol.sharenet.co.za/free/library/technica.htm?scheme=wol 

 The book "Technical Analysis from A to Z" by Steven Achelis has a good 
introductory overview, followed by information on most of the commonly used 
indicators :-
http://www.equis.com/free/taaz/inttechnicalanalysis.html

 Examine some charts on-line, practice drawing trendlines, see if you can 
recognise support and resistance levels. Try some of the technical indicators 
available. Look at Bar charts, Line charts and Japanese Candlesticks. There are 
many sites available, but one of the best is :- http://www.equis.com/java/  For 
many people, this free charting facility is all they will ever require. More 
information on this website is available in Part 6 of this series.  

 The website http://www.incrediblecharts.com/index.htm (recommended by the 
"Intelligent Investing Team") is free, though you have to register to use it. 
It has good charts, but the best feature is the large educational section. This 
is one of the best online tutorials I have seen. It covers all the basics - 
stops, patterns, psychology, indicators, candlesticks, buy signals, sell 
signals, trends, trailing stops, P&F charts, systems, strategies etc etc. The 
charts are quite good and there are over 50 indicators available. You can draw 
trendlines and annotate charts. Australian stocks only, as yet.

 Buy "Technical Analysis of the Financial Markets" by John Murphy. ISBN 
0-7352-0066-1  $140. This 540 page book covers most of the major facets of 
technical analysis, making it a good introductory text. This is one of the 
three books required for the American Chartered Market Technician Program. (The 
other two are "Technical Analysis of Stock Trends" by Edwards and Magee, and 
"Technical Analysis Explained" by Martin Pring.)

 Buy a charting program. There are hundreds available, ranging in price 
from free to well over $10,000. It is possible to spend an inordinate amount of 
time trying to find something reasonably acceptable for little or no outlay. If 
you can afford it, go straight to buying a well-known program of good quality 
such as :- 

  MetaStock  $1200  http://www.infoscan.co.nz/meta.html
  Supercharts  $1050  http://www.infoscan.co.nz/
  Ezy Chart Pro $800  http://www.paritech.com.au/
  Insight Trader $750 http://www.insighttrading.com.au/

 This is not a comprehensive list. My personal preference is for MetaStock, but 
there are other good programs available. In New Zealand, more people use 
MetaStock than all the others put together. 

 For a listing of well over 400 Technical Analysis software programs, with 
details of each, go to :- 
http://technical.traders.com/Products/catsearch.asp?cat=120  This site includes 
a search engine, which enables you to enter the features you 
require, then gives a listing of software programs meeting those criteria.      

 If you must have something cheaper, try the following sites :-
http://freeware.intrastar.net/techasis.htm 
http://www.stock-investing-software.com/freesoftware2.html
http://dmoz.org/Computers/Software/Business/Investing/Charting_and_Technical_Analysis/
 

 You will need a supply of compatible data, and some price history. (2 years 
minimum. 5-10 years would be better)  Package deals are available eg MetaStock, 
plus one years subs to NZ data and Australian data plus 8 years NZ history plus 
5 years Australian history, $1,550   http://www.infoscan.co.nz/infoprices.html  
 Shop around though - prices can vary considerably.

 Don't even think of looking at any high-priced "black box" systems. Why not? 
Read these two excellent articles :-
http://www.stanz.co.nz/education.htm#articles  
http://www.ataa.com.au/a_cn_comp_trd_.htm

 Join STANZ (Society of Technical Analysts of New Zealand) $50 pa. They 
hold monthly meetings, see their website for details. You do not have to be a 
member to attend. (Members $5, non-members $10) http://www.stanz.co.nz/

 Read some books from the following titles as listed on the IFTA website 
(International Federation of Technical Analysts):- 
http://www.ifta.org/Resources/RecommendedBooks.htm

 Join ATAA (Australian Technical Analysts Association) $180 pa. They have 
monthly meetings (in Australia) and publish a very good bi-monthly journal 
containing articles on technical analysis and trading. http://www.ataa.com.au/

 Study for the ATAA Diploma in Technical Analysis. $1600.  This is a two 
semester course, run by the Securities Institute of Australia. It is available 
by distance education (correspondence course). Full information at 
http://www.ataa.com.au/ataa_courses.htm

 The Chartered Market Technician (CMT) Program is an educational process in 
which candidates study a broad range of technical analysis subjects. 
Administered by the Accreditation Committee of the American Market Technicians 
Association (MTA), the Program consists of three levels which must be completed 
within 5 years. Further information :- http://www.mta.org/pdf/cmtbroch2001.pdf

 Britain has some more complex courses with degree examinations and 
Universities in USA, Europe and Sweden also provide for a degree in Technical 
Analysis. 
 
 Get TradeStation software $6000+  This is probably the best software of all 
for creating and backtesting systems. The programming language is more 
powerful, more complex and more difficult to learn than MetaStock. TradeStation 
has a large user base in the USA, but it is not used by many traders in NZ and 
Australia. 
http://www.tradestation2000i.com/products/tradestation/feature/default.shtm

      Written for the "Learning to Invest" series by Phaedrus, updated 28/11/01.


 


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