John J.Murphy – Ten Laws of Technical Trading (Article)

Which way is the market moving? How far up or down will it go? And when will it go the other way? These are the basic concerns of the technical analyst. Behind the charts and graphs and mathematical formulas used to analyze market trends are some basic concepts that apply to most of the theories employed by today’s technical analysts.

John Murphy, StockCharts.com’s Chief Technical Analyst, has drawn upon his thirty years of experience in the field to develop ten basic laws of technical trading: rules that are designed to help explain the whole idea of technical trading for the beginner and to streamline the trading methodology for the more experienced practitioner. These precepts define the key tools of technical analysis and how to use them to identify buying and selling opportunities.

Before joining StockCharts, John was the technical analyst for CNBC-TV for seven years on the popular show Tech Talk, and has authored three best-selling books on the subject: Technical Analysis of the Financial Markets, Trading with Intermarket Analysis and The Visual Investor.

In The Visual Investor, John demonstrates the essential visual elements of technical analysis. The fundamentals of John’s approach to technical analysis illustrate that it is more important to determine where a market is going (up or down) rather than the reason behind its direction.

Map the Trends

Spot the Trend and Go With It

Find the Low and High of It

Know How Far to Backtrack

Draw the Line

Follow That Average

Learn the Turns

Know the Warning Signs

Trend or Not a Trend?

Know the Confirming Signs

About the Author

John J. Murphy is an American financial market analyst, and is considered the father of inter-market technical analysis. He has authored several books including Technical Analysis of the Futures Markets. He later revised and broadened this book into Technical Analysis of the Financial Markets.