Does Technical Analysis Work in Commodities and FX?

E

etfarb

When I first started to in this game I started from the fundamental point of view and then I became a trader. I thought technical analysis was the answer to everything, until i realized its a load of shit. I trade equities and indexes but I wanted to open up a thread in regards to technical analysis in commodities and FX

Since both are based on supply and demand factors at the present and TA is an attempt at explaining the past and forcasting the future. Can technical analysis work in these markets?

I would love to hear from the community their opinions on TA in these markets.
 
TA works in any markets with minor adjustments depending on the market "character" (volatility et cetera). Definitely works very well in FX.
 
in the 1950's when TA books were first written, stock fundamentals were an inside game, so TA was a way to track market psychology. It tracked when most got in and when most got burned.

If you get over there into beans and grains, almost everybody trades on fundamentals, namely rain, in USA, South America and Africa.

All I trade anymore is forex. It's a real trip. 90% of the forex market is just small retail traders. If the ECB just sneezes they all dump or buy. And the rest of the time they are watching TA. And that's all technicians ever do. They just watch and pontificate. Everything is a setup, meaning if something else happens, then something else could happen. If they ever actually do make a trade, they're not in very long, because something else could happen. It's a trillion dollar market, but not at all times. Those big banks can really move a market intraday. If they really need to buy (and unlike stocks, people really need currencies from time to time) they sell everything they have, and then start buying at a better price.

Same goes for commodities, they need them at any price. Regardless whether or not it is above the 200 DMA. The only reason someone needs a stock is their need to sell it for more than they paid for it. So again, stock TA gets back to market psychos.
 
Quote from oldtime:

90% of the forex market is just small retail traders.
More...

Don't think so. Speculative forex is just a minor part of the system...and even that part is predominantly funds, banks, and institutions. The retail trader is maybe 5-10%.
 
Quote from koolaid:

Don't think so. Speculative forex is just a minor part of the system...and even that part is predominantly funds, banks, and institutions. The retail trader is maybe 5-10%.
More...
ok, check the reports

90% is retail smaller than me
 
Quote from oldtime:

90% of the forex market is just small retail traders.
More...

Oldtime, no! Of course not retail traders are major volume in FX. DB alone makes like 20% volume there (mainly in EURUSD pair). Add a few others and you get majority of transactions already.
 
Quote from koolaid:

Don't think so. Speculative forex is just a minor part of the system...and even that part is predominantly funds, banks, and institutions. The retail trader is maybe 5-10%.
More...

Doubt even 5% of total turn over in FX and major futures, such as ES, FESX and FI instruments.
 
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