Monday, August 30, 2010

Knight, Chart Your Way to Profits

In this second edition of Chart Your Way to Profits: The Online Trader’s Guide to Technical Analysis with ProphetCharts (Wiley, 2010) Tim Knight accomplishes two tasks admirably: first, he gives a clear description of chart patterns and technical indicators and, second, he explains how to use the ProphetCharts software.

In the good old days ProphetCharts provided free online charts. Then about five years ago INVESTools purchased Knight’s company (a sad day for me as my best source for futures data disappeared). Now, however, as a result of a TD Ameritrade buying binge, the software is available to clients of Think or Swim (so I have it once again) as well as INVESTools. The software is powerful. I particularly appreciate its range of available charting time frequencies, from one minute to a month, its user-friendly drawing tools, and its ratio chart option.

But back to the book. For those who want to know what’s new in the second edition, Knight explains on his blog that “it’s about 25% larger, three years more up-to-date with respect to features, and it has a lot more with respect to my own trading philosophy.”

Investors and traders who have read innumerable books on charting and technical analysis and who don’t use ProphetCharts might be tempted to move on to the next new thing. But they would miss the many helpful pointers that Knight gives in this more than 500-page book. That he devotes 69 pages to the head and shoulders pattern gives an idea of the depth of his analysis.

I can recommend this book without qualification to those who are unseasoned in technical analysis and charting and to those ProphetCharts users longing for much more than a software manual. I also suggest that experienced technical traders take a look.

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