If Technical Analysis doesn’t work, how do you define a bull market?

[Laissez Faire]

I think TA works well enough. My query was why anyone who thought it didn't could talk about a bull market, which to me pre-supposes some implicit TA.

Not really.

You can use TA to describe or take the temperature of the market so to speak, i.e., a bull market above the 200 MA or a bear market below the 200 MA.

This is entirely descriptive using past prices. Nothing controversial about that.

The question and where controversy begins is if historical prices/volume can be used to infer something about the future, i.e., is a 200-MA touch a good buy signal?

 

[Blitzjoker]

I see the phrase 'We are in a bull (or bear) market' a lot. In that context it sounds predictive, even if subconsciously.

 

[smallfil]

Amusingly, if TA "doesn't work" meaning that you always lose money using a given technique, then by definition it is not statistically random, as you should make money half the time and lose it half the time.

If you always lose money with a particular indicator, then perhaps it is in fact good indicator but that it should be applied inversely.

Seriously, the arguments both for and against TA are odd mathematically. If a particular technique always works, then everybody would make money and nobody would lose any money.

By definition if there is a highly successful technique that is purely mathematical it must remain undisclosed to the majority of traders to remain useful.

My own belief it that TA is almost never applied exclusively. Those other non-TA factors are part of the problem. An example is falling in love with a stock, like TSLA where you go out of your way to convince yourself of a breakout in order to justify buying some.

The other problem is that price movement is not just the result if 100000 little traders with their 200 share trades. Large position changes by funds and banks can start trends either way and sometimes these are nothing more than the fund manager deciding to junk a perfectly good stock for all kinds of reasons: A contractual obligation to undisclosed clients or other banks or institutions. deciding to replace a stock with something that might the the new 'hot' stock etc. etc.

TA isn't going to help you read the mind of somebody in that position and yet the price may very well be affected by those kinds of changes.

Similarly, TA doesn't help you with future news: upcoming earnings effects, future guidance, etc. all of which may very well surprise everybody. And TA doesn't predict things like the Boeing 737 MAX problem, or China delisting a stock, or development of an anti-Covid pill (Pfizer). Even news about competitors often has an effect on other stocks in that industry, for no apparent reason.

TA has to be combined with other information. That should be clear.

Use every scrap of information available to you, not just TA.

Technical analysis as applied is the problem. If you have 100 stock traders, chances are good that if you asked each one to trade using technical analysis only, there would be 100 different ways they would do so. I do not rely on news because everything you see in the stockcharts including, future news already known by insiders and their buddies are old news. In purest form, a stockchart contains are the trades of all market participants happening in that particular stock. That is why technical analysis, applied correctly, can put the odds in your favor of being right and making monies.

 

[traider]

A broken clock works twice a day

 

[murray t turtle]

Don't let anyone try to convince you "TA doesn't work". It ALWAYS works... all markets, all time frames.... once you learn and apply it correctly. (Not suggesting it "works every time, 100% of trades"... rather properly applied TA significantly increases your probabilities. Sort of like they saying, "The Race Is Not Always to the Swift, Nor the Battle to the Strong; .................................................................)


If it seems "TA aint' working for you", it's because you're not doing it right.

%%
Good points; but really depends on market being traded.
I read my contract this month, racing, or anything like it \or demo derby cancels the contract/even on private property/LOL
Guns and AMMO companies do tend to like hi velocity; but even there many exceptions apply..........................................................................................................As far as ''losing on evert trade'' that would bean amazing feat, but not a goal/LOL.
Back to my 200dma.... charts

 

[Pekelo]

Without reading through the thread, anybody has pointed out that the premise of the question has nothing to do with the second half of it? It is like:

If a bear shat in the wood, why did my house burn down? 2 completely separate premise/questions. TA itself has nothing to do with the def. of bullmarket. I amnot sure the exact %, but if the market gains year over year X%, that is a bullmarket, where X is probably > 5.

But seriously, my house is in smokes, where is that damn bear?

 

[zdreg]

Without reading through the thread, anybody has pointed out that the premise of the question has nothing to do with the second half of it? It is like:

If a bear shat in the wood, why did my house burn down? 2 completely separate premise/questions. TA itself has nothing to do with the def. of bullmarket. I amnot sure the exact %, but if the market gains year over year X%, that is a bullmarket, where X is probably > 5.

But seriously, my house is in smokes, where is that damn bear?

With Goldilocks like the current market.

 

[deaddog]

With Goldilocks like the current market.

 

[Scataphagos]

Good points; but really depends on market being traded.

NO, it doesn't.

 

[murray t turtle]

A broken clock works twice a day

%%
Good;
+ good thing a 200dma works much better than a broken clock.
But with the exception of a clock running an hour slow or hour fast consistently i dont use a broken clock radio for main time frame.............................................................