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The Visual Investor: How to Spot Market Trends, Second Edition by JOHN J. MURPHY

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Conclusion

WHY IT’S CALLED VISUAL INVESTING

This book was written with a number of goals in mind. One was to introduce the reader to visual investing by explaining in simple language some of the charting techniques that professionals have used for decades. A second goal was to show how to use these visual tools for all of the financial markets that include commodities, currencies, bonds, and stocks on both a domestic and a global scale. An emphasis has been placed on using visual tools to implement asset allocation and sector rotation strategies primarily through mutual fund and exchange-traded funds. Calling this approach “visual investing” has two reasons. First, that’s just what it is. We look at pictures of markets. The pictures tell us what a market is actually doing. They tell us whether a market is going up or down. That’s all that really matters. “Why” a market is going up or down isn’t that important.

THE MEDIA WILL ALWAYS TELL YOU WHY LATER

You can pick up your newspaper, turn on your television, read your favorite financial web page and learn why markets did what they did the day before. The reasons seem clear and reasonable. There’s only one problem. If the reasons were so clear, then why weren’t you told about them while you still had time to act (like the day before yesterday). The main reason they don’t warn you is that media experts usually don’t know the reasons beforehand. When I worked as the technical analyst for CNBC, I used to get frustrated watching ...

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