What information does Technical analysis tell you ?

[traderwald]

Hi guys,

I want to ask what information does Technical analysis give you as a trader ? I am looking to understand the meaning of technical analysis. Hence, I am NOT asking what signal does (buy or sell) TA give you and how and NOT asking which indicator means what ?

In the raw form, I want to understand what is collection of information that technical analysis provides (which then can be used for further interpretation and signal) without any links to any particular indicator or method.

So, a sample from you answer may look like:

When I do TA, it gives info such as below about the market (let us for a particular share called UL):

- there is lot of buying happening in UL
- buyers expect a higher EPS in the earnings report.

or something like that.

In asking this question I am trying to understand how fundamentals manifest in TA. What does TA actually tell you, rather than what signal to interpret from what TA is showing.

 

[tommcginnis]

T/A provides a number that summarizes either of price, volume, or both, for the market under evaluation, according to the user-specified parameter choices.

However, the question you pose expects an interpretation, not an empirical summary.

No can do.

 

[dozu888]

darn OP if you posted this a few months earlier I could have given a better answer..

due to my other businesses I know UL well and actually bot a bunch before KHC wanted to buy... of course I was happy with the lucky windfall profit, but in the following months while KHC quickly faded from the initial pop and went into free fall, UL was jacked up there as if the merger wasn't dead.... I think I sold it at the top tick, but I don't remember some other details related to the story as it was many months ago.

forget TA... in trading you just need to unfold stories, it's more like situational analysis.... of course you need to see the price... but drawing lines and shit is just waste of time.

 

[wartrace]

It tells you what happened "x" periods ago?

 

[imjohn]

forget TA... in trading you just need to unfold stories, it's more like situational analysis.... of course you need to see the price... but drawing lines and shit is just waste of time.

Since joining the forum in early '18, feel like I've seen dozu888 talk "waste of time" on every trading thread. So I wasted the last several minutes of my own time on a dozu "waste of time" search.

Come on, guy... you're sounding like a broken record.

why waste time with some pathetic back test.

trading is a waste of time.... and I am saying this after having pulled lots of dough from the market.

why waste time on garbage, when you have blue chips like AMZN going up every day?

trading is complete waste of time... like I said, if you want to play zero sum, bet on football, far more dumb money there.

just look at all these discussion threads... ET is basically 98% dumb money... it's not an insult... just cold fact... amateurs have no chance.

short term trading is a waste of time.... look at these charts... trends are running for years for 100's of % return... why work so hard for pennies.

that's why short term is a waste of time.. with my formula: positive sum + save/invest

+ catch super cycle... should be no biggie to accumulate $1m in qqq, which returns 13% per year thereafter, without you lifting a finger....

short term trading is waste of time... get a real, rewarding career and throw all the money you can into the up trend... that's how you get to the promise land.

short term trading is a waste of time... you don't see any real stories unfold.. just price jumping up and down doesn't really tell you much, the noise/signal ratio is way too high to worth the effort.

For short term trading the 7% return is irrelevant and it is a true zero sum game. Actually negative sum if you count commissions and slippage. A complete waste of time as for retail traders it is a massive negative sum game. Working as plumber is much better knowing you will make $200 if you go to work today.

day session is a waste of time. Just a bunch of people trying to screw each other.

The market is NOT fractal. There is an optimal time frame to trade. And that is not intraday.

intraday is complete waste of time... I have nothing to contribute here

you are wasting your time.

I am saying this as a 20 year veteran, having made enough from the market for financial freedom.

actually - giving up asap is a very wise move... generally speaking trading is a waste of time.

1) short term trading is a waste of time and the time frame gets ever more crowded by robots.. so giving up is a wise move... i'd not even call it a 'give up'.. 'strategic shift' sounds better

to me the absolute amount of the account is not much of an issue... if you actually have an edge you can trade 1 share and grow that account fast enough.

the problem is finding that edge and there isn't any... over the course of 20 years in the market I have met in person or remotely, hundreds of traders, can count on one hand those who make enough for a living, which is inline with the industrial stats.... 1% makes enough for a living... this IS a waste of time...

- day trading the SP is a waste of time; you need 10000 hours to learn, and the success rate is too low... you are competing against a lot of smart people, and a lot of robots programmed by smart people.

intraday only makes sense if the direction is so certain for the day and you can leverage up and make a killing... that maybe account for 10% of all the days max...

the other 95% of the days it's mostly random... waste of time to trade intraday.... don't listen to the vendors - "look these things move every day, so many opportunities".... doesn't matter, the waves in the ocean move every day, but you can't take advantage if they are random.

step 1 - throw all your savings into QQQ and hold;

step 2 - get job training, double your salary, and throw all additional money into QQQ and hold;

...

trading is a waste of time.

I am saying 2 things -

1) trading is a complete waste of time;

2) if you still want to go at it, courses are complete waste of money.

day trading is waste of time.. don't do it.

just blind buy $5k every month, don't talk to people about stocks, don't read news about stocks.... enjoy your engineering life, enjoy your rental house... company with your wife and kids... have a good life.

yup agree with the aboves... day trading is waste of time.

take advantage of the job market... get some basic training.. and even if you just become a tradesman and make $50k....

use a simple savings calculator, $1000 down, $1000 a month, buy QQQ and hold, 12.5% annual return, you million in 20 years.... you retire comfy, or go to Thailand and live like a king.

14000 * 1.12^20 = ~$140k, almost enough to retire permanently in Thailand or Panama.

yeah - that's sitting in QQQ for 20 years... trading is complete waste of time.

and the much bigger is the opportunity cost.

this is a waste of time..

see my 'AI' thread... this revolution is just in the 2nd inning... get in now, still chance to get rich!

trading is waste of time.

intraday makes the least sense... the big boys simply don't breath in this rhythm... I know somebody who is profitable intraday, but he still goes into each day with a bias, based on the longer time frame back drop... my view is that in a slow bull grind it's a waste of time... intraday makes sense only when you are so certain on the direction and you can just pile on and make a killing...forget trading 1 contract and sizing up gradually... I am talking about when you smell blood you put on 10-100 contracts and make your year in a few days... that's what intraday is for.

so bottom line is get that earning stream way up there and throw every dollar into riding the super cycle... the fastest way to riches... trading is waste of time.

 

[Trader Curt]

but drawing lines and shit is just waste of time.

*Facepalm*

No those lines are extremely helpful. When you know where your support and resistance is then you can trade better.

Did I really just have to explain that???

 

[dozu888]

*Facepalm*

No those lines are extremely helpful. When you know where your support and resistance is then you can trade better.

Did I really just have to explain that???

support/resistance is a myth.

 

[dozu888]

Since joining the forum in early '18, feel like I've seen dozu888 talk "waste of time" on every trading thread. So I wasted the last several minutes of my own time on a dozu "waste of time" search.

Come on, guy... you're sounding like a broken record.

have you thought about this possibility.... perhaps, if traders actually abandon everything i call waste of time, perhaps their success rate could be higher?

 

[Trader Curt]

support/resistance is a myth.

Yeah, ok buddy, have a great day...

 

[Specterx]

Hi guys,

I want to ask what information does Technical analysis give you as a trader ? I am looking to understand the meaning of technical analysis. Hence, I am NOT asking what signal does (buy or sell) TA give you and how and NOT asking which indicator means what ?

In the raw form, I want to understand what is collection of information that technical analysis provides (which then can be used for further interpretation and signal) without any links to any particular indicator or method.

So, a sample from you answer may look like:

When I do TA, it gives info such as below about the market (let us for a particular share called UL):

- there is lot of buying happening in UL
- buyers expect a higher EPS in the earnings report.

or something like that.

In asking this question I am trying to understand how fundamentals manifest in TA. What does TA actually tell you, rather than what signal to interpret from what TA is showing.

The best use of TA for what you're describing is to see when "something" has changed in a market.

Say you see a market that has been lazily consolidating for 10 months, near the lower end of its historic range, and it probes down to a new local low. Then out of nowhere the price rockets higher in two solid green daily bars, each closing at its high, covering in two days what would be covered in two weeks of typical action during the consolidation. This type of behavior is often driven by a clear fundamental catalyst forcing a rapid re-pricing in the market, which are almost by definition the best directional trades.