Quote from TraderZones:
Not according to everyone. Price action followers do not consider it to be technical analysis. TA is pretty much people throwing cans of lagging indicators and patterns at a market trying to get value add.
TA has been pretty much shredded by serious institutional studies. Especially after including all trading costs. Every time this fact is brought up, TA lovers rebuke it via personal opinion, of course, without proof.
However, many ET TA denizens swear by it in spite of the fact that almost no traders here are longterm seriously profitable.
We seem to be deviating from the original topic (recommended reading)... but we might differ in our understandings of the term "Technical Analysis".
Your statement was a general blanket statement saying:
TA (Technical Analysis) is a waste of time.
I said it is not a waste of time.
I did some searches on the definition of "Technical Analysis":
(stock exchange) analysis of past price changes in the hope of forecasting future price changes
wordnet.princeton.edu/perl/webwn
Technical analysis is a financial markets technique that claims the ability to forecast the future direction of security prices through the study of past market data, primarily price and volume. ...
en.wikipedia.org/wiki/Technical_analysis
A stock or commodity market analysis technique which examines only market action such as prices, trading volume and open interest
en.wiktionary.org/wiki/technical_analysis
The study of charts of historical price movements to establish a pattern in order to predict price movements and establish trigger points when either a sale or purchase should be made.
www.lme.com/glossary.asp
.....
http://www.google.com/search?hl=en&...analysis&sa=X&oi=glossary_definition&ct=title
Those seem to be the general understanding of Technical Analysis: you look at a price chart along with volume.
So unless you are trading solely based on the information on an order book of a stock... If you look at a chart, you are using Technical Analysis.
Price action. What does it all mean? Do you trade on Double Top, Double Bottom, Head and Shoulder, Flags and Poles and all that (purely on the pattern, no indicator added). If you do, you are saying this is NOT Technical Analysis? I don't understand.
Perhaps you can examplify for us - and I am not asking you to give out your trading secret, just a general explanation will do - what you base on (if you do base on something) to place your trade? You said "Price Action". It is so general that I don't quite know exactly what it is. It is breaking prior Support/Resistance? Did you read it off a chart? Oh... no, you don't need to look at a chart as you have all these numbers memorized right? And you get those numbers by reading the Ticker prints, right?
I don't know if it makes me in an extreme minority. I enjoy reading and posting on ET regularly. I do trading for a living. Have been consistently profitable for over 3 years. I don't know if that qualifies as your "long term". I don't paper trade. And I don't think much of it (all those papertrade contests.)
And BTW: I do use those useless, meaningless, lagging indicators such as Moving Averages, Bollinger Bands, RSI and such to help me place orders.
