Essential Technical Analysis by Leigh Stevens

WHOM THIS BOOK IS FOR

Some of these categories of individuals overlap and one person cannot always
be so easily defined, but the following are market orientations that
are common.

❙ Investors in stocks and mutual funds, including those who have a buy
and hold philosophy but who are open to learning the entry and exit
decisions that technical analysis helps provide. Mutual funds can be
charted like stocks also, and there are sources of closing prices you
can download every day if you use a computer. You can chart these
prices daily on graph paper also by using the financial press.

❙ Traders, including day traders and those who trade in and out of
stocks over time as opportunities present themselves. Chart patterns
and indicators work basically the same way whether seen on a 15-
minute, hourly, daily, weekly, or monthly chart. Traders are going to
tend to rely more on computers and Internet information.

❙ The average investor, who combines a bit of both investing time
frames and may combine elements of fundamental and technical or
chart analysis. And, by the way, it’s been shown that the average
holding period for stocks is now down to around 10 months.

❙ Someone who has no prior knowledge of technical analysis. I assume
at most that you have some familiarity with stocks, the market,
and have bought and sold stocks. You may not have shorted
stocks previously.

❙ People willing to put some time into studying the market and keeping
track of their stocks and mutual funds, relative to the market and
its sectors. “Never stop evaluating” tends to be the motto of top
money managers and traders.

❙ Pragmatists. Certain core technical analysis principles and precepts
show useful information about market trends, but cannot always be
demonstrated, proven, or even explained.
The fact that they do work
can be seen over and over, however. Those less interested in the theory
and more interested in what works and its practical use will find
technical analysis helpful.

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