What is Technical Analysis? Why does it work?

[Dinosaur_Supervisor]

There is a big difference between price action at the intraday level now and in the pre-HFT era, unless you can show some pre-HFT charts that look similar to the following:View attachment 163247 View attachment 163248 View attachment 163246

Are sure these are not bad ticks?
Anyway, I can show you current charts of liquid assets which looks like pre-hft charts. Hell, Brooks himself teaches with current charts (paid course).

 

[WildBill]

There is a big difference between price action at the intraday level now and in the pre-HFT era, unless you can show some pre-HFT charts that look similar to the following

Keeping the spirit of Don Quixote alive. Seriously, find another windmill to tilt at.

 

[Simples]

Technical Analysis determines a bias on the direction of an underlying. In other words picking a stock direction. The hard part is managing your money around that bias. No technical analysis is always right in fact statistically they are most likely correct 50% of the time. Lets say you find one that gives a slight edge (i don't believe you can) . What percent of your portfolio are you going to employ for each trade? When do you take losses? When do you take gains? You may have picked the stock to rise to a certain level but what happens when at first it goes down before it rises back up and hits your target? You could take a loss by hitting your stop making the trade a loss even when you were right!

Why 50%? How can you assume anything without a defined trading plan with risk management? Please give a rationale if you have any.

 

[Simples]

Spot on , done properly TA is nothing more than measuring the psyche of market participants as a whole , Bot programmers who have a handle on this mass behaviour rather than curve fitters will rule the world . Learn price action first , then learn to code and you will give yourself a shot to be elite , top 1% .... 10,000 hours needed , if you havent got the time/drive go do something else .. IT WILL NOT BE EASY

There are those of us who do listen and study. Havent reached 10k hours yet it seems but getting there. Its been educational, in a different ways than school, work, anything. Its good to hear from someone who have walked the path.

 

[cvds16]

There are loads of technical analysis ... my personal brand is multi timeframe cyclical analysis ...
gold should a good buy @ 1202.50 going to 1307 usd, let Surf know I predicted this beforehand

 

[cvds16]

It took me 10 years to get it ...

 

[vicirek]

Well, statisticians must have become millionaires if it is true that the statistical instruments (ema, macd, etc.) based technical charts really gives insights into the market

They are just for analytical/academic purpose!

Feel free to visit my threads:
http://www.elitetrader.com/et/index.php?threads/trading-knowledge-vs-trading-skillset.298662/
http://www.elitetrader.com/et/index...ay-strategy-for-index-futures-options.298637/

ema, macd, etc. are not statistical instruments but rather derive from signal processing. However, one can hardly hear that statisticians or signal processing engineers become millionaires by applying their knowledge to the markets.

 

[Mysteron]

Because everyone else is using it? It is the study of human emotions/price?

It is how price works?

No, it is your own personal HUD used to guide your thinking and actions.

 

[viruscore1]

yeah, it works 50% of the time...

 

[cvds16]

There is a big difference between price action at the intraday level now and in the pre-HFT era, unless you can show some pre-HFT charts that look similar to the following

the bots justs made the game more refined but in essence nothing has changed, it's still all about price action = the measuring of supply and demand ...