Book Review: Secrets To Profiting In Bull and Bear Markets Review by Gordon (TNO member since July 2002) Stan Weinstein's Secrets To Profiting In Bull and Bear Markets is likely one of the easiest to read and understand texts on Technical Analysis, yet the author presents a sound, practical, no-nonsense guide to buying and selling stocks. What's more, it's actually an enjoyable read. This book is about pure technical analysis (he dismisses fundamentals), but it is not yet another book defining all those fancy theoretical chart patterns and indicators.

Weinstein's approach to stock trading is based on a deceptively simple insight that nearly all stocks go through four price stages. These stages are accumulation or basing (Stage 1) advancing or uptrending (Stage 2) topping or distribution (Stage 3) and declining or downtrending (Stage 4). The reader is shown how to use this stage analysis to decide which are the best stocks to buy or sell (short). With this framework, other important considerations such as market top-down analysis, Volume, Relative Strength, a 30-week moving average, trendlines, price analysis, ways to judge the technical health of the overall market, are combined so that the best investment decisions are made and at the right time.

This book is written for the trader, who Weinstein defines as someone with a 2 to 4 month time horizon, and for the longer term investor.

Readers won't find any mention of those short-term chart patterns found in many technical analysis books, but the longer term patterns such as head and shoulders, double bottoms are covered as part of sometimes recognisable basing or topping pattern formations.

A great feature of this book is that it contains numerous chart examples to illustrate the presented concepts. Unlike other technical analysis books with a focus on charting, this one does not have you wishing the author had provided more illustrations to recognise the chart patterns in all its different forms. If that isn't enough, each chapter provides a Quiz with answers and further chart examples to make sure the reader fully understands the material presented.

Make no mistake, this book is not about theory. Weinstein provides specific rules and guidelines for what to buy, when to buy and sell, and how to place an order for both traders and investors alike. Whilst this book does not cater to very short-term traders, even they will benefit as the stage a stock is in will have a say in the likelihood of the success and the extent of the price movement for even short-term price movements.

I have personally taken the concepts presented in this book to heart and have adopted it to suit my own trading style (I believe any serious market player ultimately needs to do this with any text book they find useful). After all, this book is based on the US market with all its traits and as experienced traders know, each market develops it's own character. For instance, I don't use the 30-week moving average though I will look for upward momentum approaching a breakout, nor place as much emphasis on Volume as Weinstein.

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