The standard approach to stock investment is to analyze corporate value through fundamental analysis to identify undervalued stocks, and then use technical analysis to determine trading timing. This is a practical and useful alternative. Because stock prices fundamentally depend on a company's ability to generate profits, fundamental analysis is crucial.
However, psychological factors also have a huge impact on stock trading.
Stock prices do not always go up or down, but rather move in certain trends or patterns.
That's why technical analysis is useful for analyzing this trend.
In conclusion, it is reasonable to use fundamental analysis together for stock selection and technical analysis for trading timing.

--- p.22

One of the biggest challenges beginner investors face is developing a set of principles for deciding when to buy and when to sell.
Chart analysis is crucial for beginner investors because it allows them to determine trading timing through technical analysis. Gaining this experience can be a huge help in developing their own trading style.
Therefore, this book focuses on conveying the basic framework rather than the application of chart analysis.
We're introducing a variety of technical analyses, so it's a good idea to study and master the analysis method that best suits you.
And one thing that's often overlooked is risk management. A significant portion of novice investors' failures stem from being greedy and losing money.
Chart analysis can be surprisingly helpful in managing these risks.
Risk management is especially important for investors who lack information.

--- p.29

Stock prices fluctuate, rising and falling throughout the day.
This change in stock prices is ultimately the result of a clash between the power of those who want to buy and those who want to sell.
So, even a single small candle contains a lot of price information.
If the stock price moves up and down little during the day, the length of the candlestick becomes shorter, and conversely, if the movement is large, a large candlestick is created.
The larger the candle, the more the balance of power between buyers and sellers is tilted to one side.
The more people are eager to buy, the more red candles there will be, and the more people are pessimistic about the stock price, the more blue candles there will be.
You should be able to see the most important information about the stock price at a glance, such as the opening price (opening price), closing price (closing price), the highest price of the day (high price), and the lowest price of the day (low price). This shape is similar to a candle, so it is called a candle chart.

--- pp.40-41

A bullish counter-strike pattern occurs when candles of opposite colors close at the same price.
The final daily candle is a bullish candle, and the previous day's daily candle is a bearish candle.
Each candlestick has a long body, which is a pattern that occurs in a downtrend and will have an upward reversal effect in the future.
If the next day's stock price rises and a new closing price is formed at a higher level than the previous closing price, the possibility of an upward reversal becomes more reliable.
This pattern is less reliable than a piercing pattern that suggests a bullish reversal.
A bearish counterattack pattern occurs when candles of opposite colors close at the same price.
The final daily candle is a negative candle, and the previous day's daily candle is a positive candle.
Each candlestick is a pattern with a long body, and this pattern, which occurs in an uptrend, will have a downward counterattack effect in the future.

--- p.60

A gap is when the stock price on the day is formed with a difference of 3% to 5%, or more, compared to the previous day's stock price.
The reason a gap is created is that in the case of an upward trend, it means that the buying force is very strong, and in the case of a downward trend, it means that the selling force is very strong.
So, when a gap opens, it can be a signal that the stock price may be about to start a major change.
This is precisely why investors pay special attention to gaps.
To create a gap, there must be strong buying and strong selling pressure.
Therefore, the so-called 'forces' with significant funds and quantities will lead the gap.
When the force leading the stock price creates a gap, it means that it is trying to 'set the direction of the stock price.'

--- pp.65-66

The reliability of a trend increases over the long term.
Since the long-term average is also the consensus of investors who have invested for a long time on stock prices, we can see from many examples that the trend does not change easily.
For example, your math score was 70 in January, 75 in February, and 78 in March.
So, can we expect a score of around 80 in April? Will we be able to feel the increase as our scores improve? Just as scores show upward trends and patterns, so do stock prices.
But in stocks, trends are even more important.
Because stock prices are money.

--- p.76

There are probably few investors who would deny that POSCO is a good company.
No matter how good a company is, it is difficult to achieve good business performance when the economy is bad.
Investing in stocks to win the game is also difficult.
Of course, you can make short-term investment profits by experiencing occasional rebounds, but investing when the economy is doing well is more likely to be successful.
If the 120-day moving average is trending downward, it's best to take a conservative approach to investing.
However, since the second half of 2020, the slope of the 120-day moving average has stopped declining and is moving sideways.
It's a good company, so I believe they'll give me another chance someday.
However, the fact that you may have to wait a long time is a difficult condition for beginners. However, if you are managing your funds for the long term, it is recommended to consider investing when the 120-day moving average turns around.

--- p.84

Beginner investors often fail to capitalize on trends.
In an upward trend, people tend to think the stock price is expensive and hesitate to buy.
Then, when the stock price rises sharply, you swallow your regret for not being able to buy it.
Afterwards, when the trend reverses and declines, only then do you decide that the stock price is at an appropriate level and make the purchase you had been putting off, but unfortunately, the stock price is pushed down in a downward trend.
If you buy like this and don't set a stop loss accurately, you will become an involuntary long-term investor.
In this way, stocks with negative balances continue to pile up in stock accounts, and investors with limited investment funds are unable to further restructure their portfolios and end up giving up, saying, "I will never invest in stocks."

--- pp.105-106

For a stock price to rise, there must ultimately be strong buying pressure. The fact that the low price of the purchases, which are made based on the assumption that the price is low, is rising is also important evidence of a shift to an uptrend (please see the explanation of trend lines for more details on this).
One more thing to note is that the choice in the sideways section is important.
It is necessary to check whether the sideways movement will end and the price will rise, or whether it will move below 5% again within a week and then return to the sideways movement again.
The pattern of 'fall, sideways movement, and then rise' appears frequently. By keeping an eye on stocks in this sideways movement and confirming whether they break out of the box before trading, you can relatively reduce risk and reap profits.

--- p.109

The momentum indicator is an indicator that compares the difference or rate of increase or decrease between the current stock price and the stock price from a certain period ago.
Simply put, it shows how much more expensive or cheaper it is over time compared to the reference date.
Then, the goal is to determine the extent of acceleration in the current trend and use it to predict stock prices.
By continuously comparing the current stock price with the stock price at a certain point in the past and observing the up and down oscillations centered around the equilibrium line (0), it helps in investment by confirming the direction and strength of the trend.
Many auxiliary indicators are created using this very principle, which is why it is very helpful in understanding various indicators.

--- pp.134-135

Even someone who doesn't know anything about stocks can see at a glance that the chart above is steadily rising with higher lows.
Of course, there are months that go down in the middle, but overall, there are far more months that go up, and the result is a truly beautiful rise.
If you invest in this market and wait, even if there is a slight decline in the middle, I believe even novice investors can easily achieve good returns.
Trends are sometimes very simple and not difficult.
You can achieve higher performance more likely by following the trend.
Conversely, going against the trend can be a difficult and challenging path for even the most accomplished investors.

--- p.173

The MACD indicator and oscillators are indicators that improve on the lagging nature of moving averages, but they tend to show buy and sell signals a little later.
Also, MACD often does not provide good signals when the stock price is moving sideways.
Since it is a representative indicator of trend indicators, it should be noted that its accuracy is higher in strong trends.
When a short-term trend isn't forming, buy and sell signals are often mixed, resulting in false signals. This can make it difficult for novice investors to immediately invest. Keep in mind that the MACD indicator utilizes averages, making it more useful for determining mid- to long-term directionality rather than short-term price movements. By focusing on blue-chip stocks, even novice investors can increase their chances of success.

--- p.184

We can get many hints from the term Ichimoku Kinko Hyo itself.
You just have to understand the meaning of the two words.
The word 'Ichimoku' means to grasp at a glance.
This indicator embodies the developer's desire to understand the past, present, and future of stock prices at a glance.
What we mean by 'balance' here is quite important.
The fact that the current stock price is projected into the past and into the future also means that it is symmetrical and balanced and that they influence each other.
The future level of stock prices is also influenced by past performance and is balanced at a symmetrical level, so stock prices are predicted.
For example, if a stock price falls for one month, it is assumed that it will also take about one month for it to rise.

--- pp.218-219

The principle of completing the head and shoulders shape is as follows.
To complete the head and shoulders shape, start with the shoulder corresponding to the rise on the left.
Stocks are also a psychological battle, so they can be understood through the psychological flow of investors.
When a positive factor occurs and the price rises, short-term investors who have been waiting to sell begin to sell, and the upward movement ends with a trading volume, creating a left shoulder.
Afterwards, investors who had been hesitant to buy due to the lowered stock price join in, and the mainstream forces continue to buy, forming a high point, the head.
After reaching the target profit, the price falls as profit taking orders overwhelm the buying pressure.
Investors who were hesitant to buy during the previous upward trend enter the market for the last time, forming a right shoulder. When the mainstream forces leave, buying power weakens and the decline deepens, completing the head and shoulders pattern.

--- p.243

The basic concept of the Envelope indicator is similar to that of Bollinger Bands.
It is believed that when a stock price moves away from its average, it tends to regress again.
The % set for the upper and lower limits is equal to the deviation.
In other words, if you set the center line as the 20-day moving average and set the deviation to 6%, lines will be created above and below the point where the deviation from the 20-day moving average is 6% on the chart.
In a way, the indicator called the envelope is simply completed.
This envelope indicator is a very interesting indicator depending on how you use it.
In particular, changing the lower limit setting allows even novice investors to invest with peace of mind.
The upper and lower limits are set based on the trend center line and displayed.
Like Bollinger Bands, it consists of a trend center line, upper band, and lower band.

--- pp.274-275