I decided to buy this book based on favourable recommendations I read elsewhere and because I'm in the process of educating myself about various aspects of trading.
In this book, Brian Shannon, a trader with many years of experience explains probably more clearly than in any other book I've read, why technical analysis works, and how to do use it to develop understanding and insight into markets, and ultimately an edge in trading. For reference, Brian has been involved in markets since 1991, has worked as a broker, owned a day-trading firm, managed a hedge fund, ran a proprietary trading desk (where he was also the most profitable trader of that firm) and have taught thousands of traders world-wide with his involvement with MarketWise, a training firm.
Perhaps the first thing to say is that this book is not a canned "system" that you simply learn and use, although the material covered has a bias towards trend following systems and the material obviously will help in building a trend following system of your own if that's your goal. I would opine that this book should be essential reading for anyone who have an interest in trading the markets as a trend follower, particularly if you're a novice.
The primary topics covered are the 4 stages that stocks go through, namely accumulation, markup, distribution and finally decline (as popularized by Stan Weinstein) and how and why this happens and how this is evident from a price chart, support and resistance and how to properly identify and use them (including various related topics like why support turns into resistance and vice versa and the psychology of participants in the markets), trends and how to identify and use them to identify the highest probability trades including stop loss levels, profit targets and consequently risk/reward ratios, volume and how to properly use it, moving averages and how to properly use them (hint: not as timing indicators for entry but rather as "a visual reference point to which price can be compared in order to identify trends and market structure."), the role of time, how and when to buy or sell short, news and fundamentals and how this should influence your risk/reward rules, short squeezes - what they are and how they happen, a chapter on risk management and strategies, a chapter of collected quotes, rules and general trader wisdom to ponder and internalize, and finally a chapter on "putting it all together" where Brian explains how he uses all these elements in his own daily and weekly trading regime. Regarding the topic of risk, I feel I should add that the topic of risk management is actually weaved throughout the entire book, even if there's a dedicated chapter on it. As Brian says in the introduction, "The number one job of a trader is that of risk manager." Very true and essential to understand/internatlize if you want to make a success of trading.
The book itself is a large (A4) hardback book printed in colour, comprising 184 pages. The print is easy to read and well spaced, making it easy to underline and make notes in the borders. I bought my copy through a third party seller (booktrader88) who gave excellent service and packed the book very well using multiple bubble wrap packages, delivered via DHL.
This review is the subjective opinion of an Investimonials member and not of Investimonials LLC
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