Written by Edwards and Magee, this book is considered by many to be the "bible" of technical analysis. First published in 1948, the book is now in its 8th edition and has sold more than 850,000 copies!

Many of the companies they use as chart examples -- Nash-Kelvinator, New York Central and Hudson Motor -- are of firms that no longer exist. What makes the text so valuable then? The book is the authoritative classification of chart patterns -- the same ones other writers rely on and even imitate.

Part One of the book divides chart formations into two categories -- Reversal and Consolidation. The book devotes four chapters to Reversal formations represented by such chart patterns as the head and shoulders, rounding bottoms, triple bottom and top and rising and falling wedge.

When Steve Nison published his book on candlestick patterns in 1991, candles were virtually unknown to Western chartists. Today, less than 12 years later, candlesticks are the default form of charting in most serious technical analysis programs.

Nison loves his subject and shares it very generously with his readers. After explaining how to construct candles, he covers how candles help the trader spot reversals. While Edwards and Magee focus on long-term pattern reversals that might take a month or two to complete, Nison puts his attention on candle patterns that may take one to four trading days to occur. And while weekly candle analysis is important, many of the reversals he illustrates are on daily charts. As such, his teaching is vital for swing trading success.

The book discusses some of the most important candles first: hammer/hangman, bullish and bearish engulfing, dark-cloud cover and piercing. The reader is then shown how to identify stars, inverted hammers, harami and the ominous three black crows.

Stan Weinstein's book is remarkable for its ability to simplify technical analysis into a limited number of concepts. He places the majority of his emphasis on the 30-week moving average, which is the indicator he uses to define the long-term trend.

Using the 30-week average, Weinstein defines four main stages of market action: basing, advancing, toping and declining. These are called stages I-IV. Stage I occurs when a stock trades sideways above and below a flat 30-week moving average. In stage II the moving average rises and slopes upward below rising stock prices.

In stage III, the market tops and plays "tag" with a sideways moving average. In stage IV, price remains below a consistently falling moving average. This is the bear market stage and it is here when many investors are seduced into buying a stock because it "looks cheap." Weinstein's advice here bears repeating, "Never buy a stage IV decline."

Dr. Alexander Elder is a psychiatrist by training. He brings that background to the stock market where he comments extensively on the psychology of trading, money management and the importance of controlling impulsiveness.

The parts of the book I find most valuable, however, are his comments on specific indicators such as stochastics and MACD. He is perhaps at his most creative when he takes the MACD histogram and discusses how it has four seasons: Summer, Fall, Winter and Spring. Elder's advice is to avoid buying in the peak of Summer when the stock looks most attractive and to avoid shorting in the height of Winter when the stock looks most vulnerable.

For all the concepts that Elder discusses, he also provides specific trading rules. That makes this text a treasure trove of practical stock market wisdom and one well worth studying.