Forum Archive Index - March 2002

[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. It can be accessed at :-
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 charting sites available, but one of the best is :- 
http://bigcharts.marketwatch.com  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.  

Another site with very good charts is http://cbs.marketwatch.com/tools/

 The website http://www.incrediblecharts.com/index.htm 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.)

 There are now such good charting facilities available free on the net, that it 
is no longer necessary to buy your own software in order to use TA effectively. 
If you do want your own software, there are hundreds of programs 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://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/TABooklist.html

 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 two part, two 
semester course is run by the Securities Institute of Australia , and is 
available by distance education (correspondence course). Both parts of the 
course can be cross-credited towards the SIA Graduate Diploma in Applied 
Finance and Investment. 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 1/3/02.

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