Getting Started in Chart Patterns Review

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(More customer reviews)I have been trading the markets since 1998 and as an engineer by trade, am a very visual thinker. In my first years of trading, I read and reread Martin Pring's "Technical Analysis Explained" and Dr. Elder's book "Trading for a Living". Both are excellent and caused me to fall in love with TA.
I bought Bulkowski's book both as a refresher course and out of curiosity for the statistics he provides. It did not disappoint. His extensive research is more than obvious and his writing style hit the mark. It is clear and carries the voice of experience.
According to an independent biography I found on Global Investor, Thomas Bulkowski did in fat quit his day job at age 36 by earning enough from his investments. That says a lot right there. Although the main theme of the book is to present chart patterns with their historical success and failure rates, it offers much more.
For instance, Mr. Bulkowski bares his soul on many occaisions by revealing actual losing trades he's made. These detailed discussions of his thought process in entering and exiting the trade brought back many memories for me; ones I'd like to, but shouldn't, forget. New traders will find these accounts interesting and should pay heed to them. Making money in the markets is not nearly as easy as other books will have you believe. You need to put in the time in research and, if you are a technical trader like me, look at thousands of charts over the course of years.
To punctuate this point, Mr. Bulkowski provides a great chapter called "The Art of Trading - Checklists". In it he throws down his list of "to do" items for preparing and maintaing his trades. Even if you don't follow his routine (you should have your own), you will get a feel for the kind of effort and commitment required to do this business.
As a literary device, the book uses an imaginary trader named Jake. He provides conversation with Bulkowski throughout the book and is definitely the voice of the new trader. The "teacher/student" dialog works well and is very often humorous. Imagine what a challenge it is to write a book on technical analysis with humor. This book succeeds.
As for the meat of the book, statistical analysis of chart patterns, Bulkowski's book has no rivals. I have read many other books on TA, and the pure chart pattern discussion here is the best by far. Refreshingly, very little mention of other indicators is made, although RSI and CCI crop up a couple times. I've used all the indicators at one time or another, and finally realized that they are all based on either price or volume anyway. I'm still not convinced they add value.
As an example of the chart pattern discussions, imagine you were considering trading a double top pattern. When is the right time to get in? What kind of double top is it, anyway? What are the chances of success or a reversal to the breakout line? How does the double top pattern compare to, or rank among, other patterns you could trade? What happens after the breakout, typically? Very good questions, and very good answers provided.
Although I read the book cover to cover, you may find it just as useful to use as a reference. However, I did order Bulkowski's "Encyclopedia of Chart Patterns, 2nd Edition" on the strength of this book.
Summary
If you are an experienced trader looking for a review of chart patterns or a novice trader curious what all those funny pattern names mean, this is your book. It is worth double the price Amazon is selling it for.
Good luck and good trading.

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An accessible guide to understanding and using technical chart patterns
Chart pattern analysis is not only one of the most important investing tools, but also one of the most popular. Filled with in-depth insights and practical advice, Getting Started in Chart Patterns is designed to help both new and seasoned traders profit by tracking and identifying specific chart patterns. Expert Thomas Bulkowski opens with a basic discussion of chart pattern formation and how bad habits can hurt trading. He then moves on to introduce over 40 key chart formations as well as numerous trading tactics that can be used in conjunction with them. Readers will benefit from the specifics (actual trades with dollar amounts) outlined throughout the book and the frank discussions of how trading behavior can affect the bottom line. Anecdotes from Bulkowski's own trading experiences are also included to shed light on how one of the best in the business goes about trading with chart patterns.
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Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications (New York Institute of Finance) Review

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(More customer reviews)It is entirely possible to spend more time reading trading books than doing any actual trading. This is one of the few books that will remain on my bookshelf and I highly recommend it FOR WHAT IT IS INTENDED - an excellent reference on technical analysis (TA).
What I was looking for was something to provide clear, concise descriptions on various technical indicators across all types - trend analysis, price patterns, candles, oscillators, etc. And Murphy not only does this well, but his work provides enough information that I do not see the need for another book on TA on my bookshelf, even though I know that other very good books are available (e.g. Pring). But this one is enough for me. It is well organized and indexed so that I can rapidly look up something while I am setting up trades and get the basic info that I need.
One surprise was how well written the book was and how much I enjoyed reading it. I expected a dry reference book but instead found an excellent and engaging read, perhaps with the exception of the chapter on point and figure which was not up to the rest of the book. (If you are completely new to TA, you might find it less entertaining, but in comparison to the dry tome that I expected when the monster-sized book arrived, Murphy is remarkable in his ability to convert most TA topics and examples into 'normal' English.) He also is not a proponent or zealot about any one indicator type, which I appreciate. He does a good job of describing each within the context of its value without trying to convert anyone to any specific indicator. As I do not believe in magic bullets in trading, I appreciate his straightforward approach.
Let me also note what this book is NOT so that you do not buy it for the wrong reasons:
a)As you should gather from the above, this is not a trading system. Murphy will not tell you which indicators to use most or in which combinations to produce the best results. He will provide insight into many indicators and classes of indicators but he is NOT trying to convince you to use any specific indicator in any specific way. So he doesn't try to convince you of WHAT to use, just helps you understand WHEN, WHY and HOW each indicator type is used by various traders.
b)Also, this is NOT intended to be the complete, in depth statement on any of the topics covered. For example, his section on Candlestick formations is simple, clear and includes many examples, but it is undoubtedly not the same as picking up Nison's works on Candlesticks. Similarly, you can find many books dedicated to Elliot Waves, Fibonaccis and other topics. Murphy provides the basics, but do not expect as thorough an explanation or justification as a dedicated book would provide. Then again, expect a dedicated book to try and convince you why its particular system or method is so much better than any other, something that Murphey will not try to do to you!
c)Finally, this book is NOT intended to convert people who do not accept TA into believers. Frankly, it is much easier to get most people to accept that `fundamental analysis' affects a stock's value and price, but it is harder for most to understand and accept that simply analyzing the stock's price and related indicators can predict future moves. Murphy's opening chapters include some simple basic background on TA, but verbal explanations have limited value in convincing a pure `fundamentalist' that properly used technical analysis works. The only way to break down this barrier, IMO, is simply to learn and use various indicators for a while to begin seeing how predictive they can be. Murphy does not try to convert - he simply provides a learning reference. From there, anyone using TA needs to practice to become proficient.
So, in summary, I highly recommend buying this book for what it is intended to be - a reference book on technical analysis. It does this job excellently.


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For both beginnners and experienced traders, this work describes the concepts of technical analysis and their applications. Murphy interprets the role of the technical forecasters and explains how they apply their techniques to the financial markets.

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