THE ART AND SCIENCE OF TECHNICAL ANALYSIS

:
MARKET STRUCTURE, PRICE ACTION, AND TRADING STRATEGIES
Adam H. Grimes
http://adamhgrimes.com/ To be published by J. Wiley & Sons, First Quarter 2012

PART I: THE FOUNDATION OF TECHNICAL TRADING
CHAPTER 1: THE T RADER’S EDGE
Defining a Trading Edge The Random Walk Hypothesis Valid Trading Ideas Are Non-Random Finding and Developing Your Edge Studying Trading Ideas Manual Testing vs. Automated Systems The Two Forces: Toward a New Understanding of Price Action

CHAPTER 2: HOW TO READ A CHART
General Principles of Charting Indicators Toward Building Intuition Price Action and Market Structure Charting by Hand

PART II: MARKET STRUCTURE
CHAPTER 3: THE MARKET CYCLE AND THE FOUR T RADES
Wyckoff’s Market Cycle The Four Trades Trend Continuation Trend Termination Support or Resistance Holding Support or Resistance Breaking Summary

CHAPTER 4: ON TRENDS
The Fundamental Pattern Trend Structure A Deeper Look at Pullbacks: The Quintessential Trend Trading Pattern Trend Analysis Summary

CHAPTER 5: ON TRADING RANGES
Support and Resistance Trading Ranges as Functional Structures Summary

CHAPTER 6: INTERFACES BETWEEN TRENDS AND RANGES
Breakout Trade: Trading Range to Trend Patterns Preceding Good Breakouts Characteristic Patterns at Good Breakouts Patterns Following Good Breakouts Patterns of Failed Breakouts Trend to Trading Range Trend to Opposite Trend (Trend Reversal) Trend to Same Trend (Failure of Trend Reversal) Summary

The Art and Science of Technical Analysis by Adam Grimes, 2012

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PART III: TRADING STRATEGIES
CHAPTER 7: PRACTICAL TRADING TEMPLATES
Failure Test Pullback, Buying Support or Shorting Resistance Pullback, Entering Lower Timeframe Breakout Trading Complex Pullbacks The “Anti” Breakouts, Entering in the Preceding Base Breakouts, Entering on First Pullback Following Failed Breakouts Summary

CHAPTER 8: TOOLS FOR CONFIRMATION
The Moving Average—The Still Center Channels: Emotional Extremes Indicators: MACD Multiple Timeframe Analysis Relationships between Markets Volume

CHAPTER 9: TRADE MANAGEMENT
Placing the Initial Stop Setting Price Targets Active Management Portfolio Considerations Practical Issues

CHAPTER 10: RISK MANAGEMENT
Risk and Position Sizing Theoretical Perspectives on Risk Three Measures of Risk Misunderstood Risk Practical Risks in Trading Summary

CHAPTER 11: TRADE EXAMPLES
Trend Continuation Trend Termination Trading Parabolic Climaxes The Anti Trading at Support and Resistance Summary

The Art and Science of Technical Analysis by Adam Grimes, 2012

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PART IV: THE INDIVIDUAL, SELF-DIRECTED TRADER
CHAPTER 12: THE TRADER’S MIND
Psychological Challenges of the Marketplace Evolutionary Adaptations Cognitive Biases The Random Reinforcement Problem Emotions: The Enemy Within Intuition Flow Practical Psychology Summary

CHAPTER 13: BECOMING A TRADER
The Process Requirements Commit to the Process Record Keeping Journal P&L Records Statistical Analysis of Your Trading Results Quantifying Your Edge Standardizing for Risk Control Charts Summary

The Art and Science of Technical Analysis by Adam Grimes, 2012

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PART V: THEORY AND QUANTITATIVE ANALYSIS
CHAPTER 14: ACADEMIC THEORIES OF MARKET BEHAVIOR
The Efficient Market Hypothesis The Random Walk Hypothesis What Does Not Constitute Disproof Credible Challenges to the Theory Behavioral Perspectives Summary

CHAPTER 15: TOOLS FOR QUANTITATIVE ANALYSIS OF MARKET DATA
Some Market Math Three Statistical Tools A Warning against Sloppy Statistics Summary

CHAPTER 16: CASE STUDIES
Methodology The Test Universe Pythia™ Common Practice Technical Analysis Fibonacci Retracements Moving Averages The Opening Range Phenomenon Quantitative Evidence of the Two Forces Mean Reversion Range Expansion Conclusion

APPENDIX A: T RADING PRIMER APPENDIX B: STATISTICAL STUDIES APPENDIX C: SAMPLE TRADE DATA

The Art and Science of Technical Analysis by Adam Grimes, 2012

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