Theory of Technical Analysis

[ep510]

What percentage of the market are in each category (fundamental vs. technical)?

Also, I got this from investopedia:
"Technical traders, on the other hand, believe there is no reason to analyze a company's fundamentals because these are all accounted for in the stock's price. Technicians believe that all the information they need about a stock can be found in its charts."

Doesn't that argument rely on the assumption that the majority of the market consists of fundamental investors that will discount the effects of news and fundamentals into the price? Hypothetically speaking, if the majority of the market were driven by technical analysis, wouldn't that argument be worthless?

 

[whitster]

"Technical traders, on the other hand, believe there is no reason to analyze a company's fundamentals because these are all accounted for in the stock's price. Technicians believe that all the information they need about a stock can be found in its charts.""

this is rubbish

i ALWAYS see this definition.

it creates a false dichotomy, and it is completely bogus

SOME TA traders may believe that ALL fundamentals are accounted for in a stock's price

i am a TA trader, i do it for a living, and i believe no such thing

TA is simply a matter of analyzing price (and its derivatives). order flow, volume, whatever.. it's either price, or a derivative of price

some things like COT reports etc. are used by many TA traders, even though COT is arguably not TA

regardless, i do not believe for a second that ALL fundamental data is incorporated in a stock's price. that is right up there with efficient market theory rubbish

i do believe (since i make a living doing it), that using price (order flow, etc.) analysis, one can have a statistical edge in trade entries and exits.

it does not follow that TA implies, or all TA traders believe that ALL fundamental data is incorporated into price. it is certainly true that MUCH of it is.

but the statement in the definition means that NO edge can be gained from studying fundamentals, and that's simply hogwash