"One way to get started in technical analysis is to read a good book on the subject. One of my favorites is Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications by John J. Murphy. It's an easy read." -Ralph J. Acampora, CMT, Managing Director, Prudential Securities Inc.
"No one in this generation has contributed more to technical analysis than John Murphy. Through his series of books, he has ...
"One way to get started in technical analysis is to read a good book on the subject. One of my favorites is Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications by John J. Murphy. It's an easy read."
-Ralph J. Acampora, CMT, Managing Director, Prudential Securities Inc.
"No one in this generation has contributed more to technical analysis than John Murphy. Through his series of books, he has both opened the door to many and raised the standard for all who use technical analysis. His books should be required reading for everyone in the securities business and are never more than a step away from my desk."
-Gail M. Dudack, Chief Investment Strategist, Waburg Dillon Read
"John Murphy appears to have done it again...only this time in a more contemporary fashion. Technical Analysis of the Financial Markets is a must read for the novice and the professional and most important the Chartered Market Technician (C.M.T.) candidate. As a long-time point-and-figure chart devotee, I was enthused to see the book's point-and-figure chapter not only cover some of the more popular methods such as Chartcraft and Dorsey Wright, but also explore the usefulness of the original point-and-figure methodology which we practice here at Salomon Smith Barney."
-Alan R. Shaw, Managing Director, Salomon Smith Barney
Technical Analysis of the Financial Markets expands upon and updates Murphy's classic Technical Analysis of the Futures Markets by adding important new material and applying his insights to all markets, not just the futures market.
This self-study manual helps you make the best use of John J. Murphy's Technical Analysis of the Financial Markets. Its objective is to test--and thereby ensure--your comprehension of the large body of knowledge associated with technical analysis. Its easy-to-follow, step-by-step method leads you through each of the book's chapters and provides objectives that give your reading focus and help you pull together the broad array of information that Murphy offers.
This self-study manual has been designed and prepared by the New York Institute of Finance, with the cooperation and input of John J. Murphy.
This workbook is to be used exclusively with John J. Murphy's Technical Analysis of the Financial Markets (referred to as the "text").
The workbook's objective is to test--and thereby 'to ensure--your comprehension of the large body of knowledge associated with technical analysis.
The methodology is simple to follow and uses your time efficiently. Here are the recommended steps:
Before reading the textbook, go to Lesson One in the Study Guide (page 1). There you will find the Reading Assignment, which for the first lesson is Chapters 1 and 2 of the text. You will also find a set of reading Objectives and a Reading Orientation, which give your reading focus and direction. Also note the list of Key Terms (page 2). Following each term is a page reference indicating where in the text you can find a definition or explanation of the term. Pay special attention to these terms.
Read the chapters assigned for the lesson. As you read, stay aware of the objectives and key terms. Ask questions of the text. Don't be afraid to underline what you feel is important--or make marginal notes.
Go to the Challenge section of the lesson (starting on page 3). There you will find a Matching Quiz, Multiple Choice, and sometimes Fill-In questions. Answer the questions "closed book" as best you can.
Turn to the Answer Sheet, and compare your answers against those given there. To "grade" yourself on these exams, divide the number of correct answers by the total number of answers and multiply the answer by 100. The result is your percentage right. Should your "grade" be lower than 65%, you should re-read the material for that lesson.
The purpose of this comparison, however, is not to give yourself a grade. Rather, it is to determine the areas where your comprehension is weak. Toward that end, each answer has a page reference to the text and a brief explanation of why the answer is correct. We suggest that you follow up these page references by re-reading the relevant sections of the text and making sure you understand the answer.
Once you have taken these steps for Chapters 1 and 2, proceed with Lesson Two, beginning on page 7.
This workbook has been produced with the utmost concern for accuracy and freedom from error.
Nevertheless, we welcome your comments with regard to improvement.
-New York Institute of Finance Publishing Division
How to use this workbook, vii
Lesson 1: Technical Analysis and the Dow Theory,1
Lesson 2: Chart Construction, 7
Lesson 3: Basic Concepts of Trend, 15
Lesson 4: Major Reversal Patterns and Continuation Patterns, 31
Lesson 5: Volume and Open Interest, 43
Lesson 6: Long-Term Charts and Commodity Indices, 55
Midterm Assessment, 57
Lesson 7: Moving Averages, 75
Lesson 8: Oscillators and Contrary Opinion, 87
Lesson 9: Point and Figure Charting and Japanese Candlesticks, 99
Final Assessment, 115