One of the best books on trading techniques that I have ever read. It is based on stage analysis, that is, looking at charts to determine whether a stock is going up, topping, declining, or bottoming out. The author stresses using stage analysis not only on individual stocks, but also on industry sectors as well as indexes like the Dow and Nasdaq.
The philosophy is based on the view that nearly all stocks experience four price stages: accumulation (stage 1), uptrending (stage 2), top area (stage 3), and downtrending (stage 4). Therefore, an investor, has a high probability of success if he or she enters the cycle just before the stock moves to stage 2. Then he explains how to select a stock by simply studying its price/volume chart and how to time your entry. (more…)