which are some good books for for learning new techniques and strategies to use for technical analysis?
I’m looking for some reading material which could explain how to use probability and statistical models for trading.
Please don’t name the kind of books which talk about all those ages old indicators and charts like MACD, RSI, ADX, hammer or doji. I don’t want all that.
I want to increase the usage and weightage of mathematics and statistics in my trading hence only books which can help me with that.
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FInish this (https://zerodha.com/varsity/module/technical-analysis/) and then get into other books.
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Already did. I’m now interested in a little different form of trading. Please people only comment if you can help me find books related to gaussian trading models, econometrics or probabilty distributions. Or even EWT.
These are modern trading systems. Only people aware of these tell me about the books.
sorry i not aware about them, thank you for informing me.
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two books comes to top of my mind. For a trader both of them have written more like thesis paper. But there is a wealth of information to digest.
Stock Market Probability: Using Statistics to Predict and Optimize Investment Outcomes by Joseph E. Murphy
Evidence–Based Technical Analysis: Applying the Scientific Method and Statistical Inference to Trading Signals by David Aronson
Hope it helps…
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http://www.ruf.rice.edu/~bwbwn/econ400_files/ch1-ch5.pdf
http://econ.ucsb.edu/~doug/245a/Papers/Approximating%20Distributions.pdf
http://www.cs.ubc.ca/~nando/540-2013/projects/p5.pdf
http://jonathankinlay.com/2014/05/the-mathematics-of-scalping/
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First of all, technical analysis is not about finding Lows to Buy or Highs to Sell. Rather it is a mechanism or process by using which one can anticipate how fundamental parameters will churn out.
You see a stock suddenly start to rocket 18%-20% upon rumors or news within days or weeks. Your technical indicators begin to speak, smaller timeframe MAs crosses higher ones, MACD, RSI, Stochastics, CCI, Momentum, William%R, Schaff Trend Cycle, Supertrend, etc. all of them shows promise. It becomes overpriced, then, something happens, and it’s back to its same value again. For instance, consider TATAMOTORS price chart. What I am trying to portray is that, technical indicators are a function of the price. These indicators are derived from the price of the asset not vice-versa. Price is not dependent on these indicators. Thus, technical analysis is a factor of fundamental reasons.
So, throw away technical analysis and concentrate on fundas only? That’s not suggested either. Fundamental Analysis can also be wrong. The best economists in US could not foresee the recession in 2008. Ben Bernanke even went live on TV and said “nothing to fear” days before the epic crash. There are zillion of instances wherein a Stock Earnings Report shows massive Growth, awesome Results, but, on contrary the Price plummets.
Clearly, price is just an advertised number determined by the transactions happening in the market place, which in turn is only driven by Human sentiments, most often, just opinions.
I can vouch for four independent factors:
- Supply,
- Demand,
- Reaction of Supply/Demand on Price, and,
- Volume.
Understanding the Technical indicators, reading reports are a good place to start with, and of course, it helps. But in order to make a consistent profitable decisions one cannot fully rely on these things. Market provides two information only – PRICE and VOLUME, everything else is derived from it.
My suggestion would be to keep your understandings or knowledge of Technical and Fundamental Analysis as a basic foundation. Thanks to Zerodha Varsity! If you have completed all the chapters from there; then, congrats, you have learnt the basics! It’s time to move ahead, I would request you to focus on advanced school of thoughts like Market Profile, Volume Price Analysis (VPA), Volume Spread Analysis (VSA), Order Flow, Risk Management, Trading Psychology, Behavioral Economics, etc.
To give you a head start read the following:
- James Dalton’s “Mind Over Markets”,
- James Dalton’s “Markets in Profile”,
- Anna Coulling’s “A Complete Guide To Volume Price Analysis”, and,
- Bennett A. McDowell and Steve Nison’s “A Trader’s Money Management System”.
Alright! Alright! I talk too much. 
If you want to quench your thirst on Technical Analysis, then go for books written by John F. Ehlers. To mention:
- Rocket Science for Traders,
- Cybernetic Analysis for Stocks and Futures, and,
- Cycle Analytics for Traders.
“Ehler Fisher Transform” developed by John F. Ehlers is one such indicator which is based on Gaussian distribution and far better compared to traditional stochastics or momentum indicators. In the books written by him, it is well explained along with other Advanced Indicators. My favorite is “Adaptive Moving Average Convergence Divergence (AMACD)”.
For Econometrics and other stuffs you need experienced professors than books. You can visit MIT OpenCourseWare for the same. Along with video Lectures and Readings, you will also have links for the best books on these topics available in planet Earth. Consider below links:
- Topics in Mathematics with Applications in Finance,
- Other courses in Finance, and,
- Other courses in Economics (including Econometrics).
Please do yourself a favor, have patience, give yourself 9 – 12 months of rigorous study and research; slowly you will know what to seek for.
DEVOUR THE INTERNET!
ALL THE BEST!
CHEERS! 
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do you have the pdf for joseph murphy book?
@aniketchatterjee…I need to check my hard disk and let me dig it in and check over weekend. If I get it, I’ll definitely post it for you otherwise you have to excuse me, friend… all the best…
I don’t know much about technical analysis… I am also learning … sharing some books, movies and course … [Links Only… first read reviews before you make your mind to invest money for any book or course ]
Security Analysis: Sixth Edition, Foreword by Warren Buffett by Benjamin Graham (Author), David Dodd (Author)
Common Stocks and Uncommon Profits and Other Writings by Philip A. Fisher
Standard Deviations: Flawed Assumptions, Tortured Date and Other Ways to Lie With Statistics by Gary Smith
How Chandu Earned And Chinki Lost In The Stock Market? by Mahesh Kaushik
Becoming Warren Buffett (2017) - IMDb
Technical Analysis Primer for trading Stocks, Bonds & Forex | Udemy
Technical Analysis Using Elliott Wave Theory | Udemy
Value Investing Strategies for the Stock Market | Udemy
I am not promoting any course here… there are many books and courses available I just shared those I feel are related to Indian market or are general … you can search by yourself…
“Invest Time To Get Rewarded … Investing money doesn’t work alone …”
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Since you are interested in using Mathematical calculations first observe the daily movement of a stock ( Daily high - Daily low ).Take average of 14 Days.Now you can calculate the weekly range , monthly range , and yearly range. Calculations will be as follows
Weekly range is 2 times daily change
Monthly range is 4 times daily change
Monthly range is 24 times daily change.
Just want to say BRAVO!!
If you want to become a full-time trader then go for “Trading for a living” by Dr.Alexander Elder. Read it 2 to 3 times, apply the strategies you learn, test them. If you want to be an investor, find out good stocks, buy them and hold them for years. Choose what you want to become and proceed. All the best!
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Great Message ji… Thanks for ur time
Bro, Plz mention me if u able to find that book. Checked in Amazon. Kindle version not available.
You are just amazing…!
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Unfortunately no, I guess I must have borrowed it from Library …
I have a pdf version of this book.I can send you if you need it
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