Prove to me that Technical Analysis Works.

notagain said:
Fundamentals drive price action, to frame price action use a 20 day BollingerBand.
Long bias when above 20sma and short bias when below 20sma.
If only Biden would spend all the taxes recently collected.
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Not really.
Only for long term price is driven by fundamentals.
Short term price is decided by buy and sell,by supply and demand,by psychology.
This is because it is difficult to accurately determine fair value of stocks prices.
Because stock prices are not built entirely on current information, but on future expectation.
Stocks are priced at situation 4-6 months ahead, and 4-6 months ahead there are many factors which will change overtime and we can not determine now. So it is a guessing game and there are bulls who think prices will be a lot of higher and there are bears who think prices will be a lot of lower. All of these different opinions make a market. So the current fair value of prices is a range, within this range any point can be deemed as fair value.
For example,
A stock is currently at $100 and the bulls think 6 months later it will be $130 and the bears think it will be $70 . Both side have their valid arguments because there are factors that will change during this period. If all factors change as bull expect, then stock will be $130; If all factors change as bears expect, stock will be $70. So either $70 or $130 is within fair value.
When the stock fluctuates within $70 and $130, its price is determined by buy and sell, by supply and demand, by psychology, not by fundamentals.
 
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I have no interest in proving to the OP that TA works, a ridiculous request. However, if he is interested in doing his own research, I will give him some excellent places to start:

These guys are the best Wyckoffians I have ever seen. They have many free videos on YT analyzing the current markets.

https://www.youtube.com/c/WyckoffTradingMethod

FT71 posts a free market analysis video every morning. He use price/volume and some other tools, mainly volume profile. He's quite talented and no-nonsense.

https://www.youtube.com/c/Futurestrader71-Videos

Adam Grimes has posted videos of the past trades of his service which uses TA, called "100 Trades Reviewed". He is the author of the excellent book "The Art and Science of Technical Analysis".

https://www.youtube.com/marketlife

Finally, I'll just say that I think the biggest misconception that folks have about TA is that it is about Prediction when it is really about Probability. There is also Risk Management and Position Management.
 
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Volume drives price, there can be 1000 one lot ES traders buying, and 3 funds comes in selling 5,000 a piece, price going down. Same with stocks or just about any kind of auction.

So upsloping trend line or RSI pullback, more volume on buy side going to drive price up.

And if you don't have skills to understand, won't matter if you use fundamentals or TA, best to study risk management first.
 
BOC said:
I have no interest in proving to the OP that TA works, a ridiculous request. However, if he is interested in doing his own research, I will give him some excellent places to start:

These guys are the best Wyckoffians I have ever seen. They have many free videos on YT analyzing the current markets.

https://www.youtube.com/c/WyckoffTradingMethod

FT71 posts a free market analysis video every morning. He use price/volume and some other tools, mainly volume profile. He's quite talented and no-nonsense.

https://www.youtube.com/c/Futurestrader71-Videos

Adam Grimes has posted videos of the past trades of his service which uses TA, called "100 Trades Reviewed". He is the author of the excellent book "The Art and Science of Technical Analysis".

https://www.youtube.com/marketlife

Finally, I'll just say that I think the biggest misconception that folks have about TA is that it is about Prediction when it is really about Probability. There is also Risk Management and Position Management.
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Good links. Thank you.

Good trading to ya!
 
If you guys check my previous posts in this thread, I have accurately predicted the June market decline.
Now I will make another call that will show how TA works.
Friday 7/15/2022 is the day equity starts a short term up trend.
It was the first day of an up trend. So how you profit ? Long spx, set a stop at Friday day low.
9 in10 chance the up trend will come true.
In the 1/10 chance it fails, you have stop to cut your loss.
 
wmwmw said:
If you guys check my previous posts in this thread, I have accurately predicted the June market decline.
Now I will make another call that will show how TA works.
Friday 7/15/2022 is the day equity starts a short term up trend.
It was the first day of an up trend. So how you profit ? Long spx, set a stop at Friday day low.
9 in10 chance the up trend will come true.
In the 1/10 chance it fails, you have stop to cut your loss.
More...
I don't use TA and say there is a 9/10 chance you are right.
 
Handle123 said:
Volume drives price, there can be 1000 one lot ES traders buying, and 3 funds comes in selling 5,000 a piece, price going down. Same with stocks or just about any kind of auction.
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This really nails it. It is interesting to actually see it in action affecting the price. I like Sierra Charts "Delta Volume Bars". It measures the volume transacted at the bid vs the volume transacted at the ask. I don't know exactly it works but the lower you set your input value the more bars you get. Anyway it can take 10 minutes to fill a bar then you can have 5 bars fill in one second moving the price. You can visually see on your chart when someone is doing volume to take out all of the ask or bid until they get all they want either short or long.
 
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