Technical Analysis is .......to my trading...

[N54_Fan]

Fill in the blank.

I know many of you think TA is useless. I am curious to know how many people actually incorporate it in their trading system.

TA is __________.

 

[Soon2Bgreat]

Silly question I'm sure, but can you give me an idea of what the basic difference is behind Price Action vs. TA?

Generally, I'd say TA is useful (unlike this response)

 

[N54_Fan]

Quote from Soon2Bgreat:

Silly question I'm sure, but can you give me an idea of what the basic difference is behind Price Action vs. TA?

Generally, I'd say TA is useful (unlike this response)

Some think that looking at price alone and whether it is rising or falling as all that mattters. They think that the "fancy indicators" (like MACD, RSI, EMA's, etc.) just regurgitate the same information and are lagging and thus useless to use to trade. Also there are too many false signals to trade with to make them useful especially when they are conflicting.

 

[wrbtrader]

Quote from Soon2Bgreat:

Silly question I'm sure, but can you give me an idea of what the basic difference is behind Price Action vs. TA?

Generally, I'd say TA is useful (unlike this response)

Price action trading is a trader that does not use technical indicators or technical studies for trade decisions based upon price action analysis.

There are primarily three basic groups of traders that are price action trading.

1) Traders that use charts...sometimes this is refer to as chart reading of price patterns or key price areas without indicators. This is technical analysis without using indicators.

2) Traders that use time & sales/bid & ask screens...sometimes this is refer to as tape reading involving order flow without charts. This is not a form of technical anlaysis.

3) Traders that use both of the above as in charts and time & sales/bid & ask screens without indicators.

Simply, if you're using a chart with or without indicators...you're using TA. Also, if you're using a chart or bid & ask screens without indicators...you're a price action trader. Therefore, if someone thinks TA is useless while using charts for trade decisions...that's a confused trader. Just the same, traders that refers to themselves as price action traders while using at least one indicator...that's a confused trader.

For those that don't know what are technical studies (indicators), these are price moving averages, macd, cci, rsi, stochastics, bollinger bands, adx and hundreds more indicators I don't want to spend any time mentioning.

 

[N54_Fan]

Quote from wrbtrader:

Price action trading is a trader that does not use technical indicators or technical studies for trade decisions based upon price action analysis.

There are primarily three basic groups of traders that are price action trading.

1) Traders that use charts...sometimes this is refer to as chart reading of price patterns or key price areas without indicators. This is technical analysis without using indicators.

2) Traders that use time & sales/bid & ask screens...sometimes this is refer to as tape reading involving order flow without charts. This is not a form of technical anlaysis.

3) Traders that use both of the above as in charts and time & sales/bid & ask screens without indicators.

Simply, if you're using a chart with or without indicators...you're using TA. Also, if you're using a chart or bid & ask screens without indicators...you're a price action trader. Therefore, if someone thinks TA is useless while using charts for trade decisions...that's a confused trader. Just the same, traders that refers to themselves as price action traders while using at least one indicator...that's a confused trader.

For those that don't know what are technical studies (indicators), these are price moving averages, macd, cci, rsi, stochastics, bollinger bands, adx and hundreds more indicators I don't want to spend any time mentioning.

I liked your explaination better,...Thanks!!

 

[Soon2Bgreat]

Thanks, I think I get the intent behind the distinction - seems like a fine line, but it's more clear.

 

[ronblack]

Use anything that works for you and gives you a good feel of the market. Do not assign names to it. As soon as you label something, all sorts of logical dichotomy falacies emerge.

How do you label the analysis of this guy below, TA or price action?

http://t.co/QEiEJoNT

 

[N54_Fan]

Quote from ronblack:

Use anything that works for you and gives you a good feel of the market. Do not assign names to it. As soon as you label something, all sorts of logical dichotomy falacies emerge.

How do you label the analysis of this guy below, TA or price action?

http://t.co/QEiEJoNT

I would classify it as what "wrbtrader" called group #1, a trader that uses charts without indicators however, he does have MA on te chart which would suggest he uses some sort of indicators, at least occassionaly.

 

[ronblack]

Quote from N54_Fan:

I would classify it as what "wrbtrader" called group #1, a trader that uses charts without indicators however, he does have MA on te chart which would suggest he uses some sort of indicators, at least occassionaly.

He is probably using the indicators for confirmation or something along these lines.

 

[cornix]

TA is the base of my approach to markets.