New Concepts in Technical Trading Systems

By J. Welles Wilder Jr.

Quick Summary

This PDF is largely unreadable (scanned). Wilder's legendary 1978 book introduced the Relative Strength Index (RSI), Directional Movement Index (DMI/ADX), Parabolic SAR, and Average True Range (ATR) -- some of the most widely used indicators in trading history.

Executive Summary

This PDF could not be fully extracted due to being primarily a scanned image. "New Concepts in Technical Trading Systems" by J. Welles Wilder Jr., published in 1978, is one of the most influential technical analysis books ever written. Forbes Magazine called Wilder "the premier technical trader publishing his work today." The book introduced multiple technical indicators that have become standard tools in virtually every charting platform worldwide.

Known Key Concepts

1. Relative Strength Index (RSI) -- A momentum oscillator measuring the speed and magnitude of price changes, with overbought (>70) and oversold (<30) thresholds.
2. Directional Movement Index (DMI/ADX) -- A system for measuring trend strength and direction using +DI, -DI, and ADX components.
3. Parabolic SAR (Stop and Reverse) -- A trailing stop system that accelerates with the trend, providing clear entry and exit signals.
4. Average True Range (ATR) -- A volatility measure accounting for gaps, now universally used for stop-loss placement and position sizing.
5. Commodity Selection Index -- A method for ranking commodities by their desirability for short-term trading.

Conclusion

Wilder's book is arguably the single most influential technical trading book ever published, as measured by the ongoing daily use of his indicators by millions of traders worldwide. RSI, ADX, Parabolic SAR, and ATR remain foundational tools in modern technical analysis.