Bullshit, thinking outside the box will do.
Why Do Most Retail Traders Favour Technical Analysis ?
- Thread starter Fundlord
- Start date
Bullshit, thinking outside the box will do.
Because they want to take the blame off TA for massive extermination of traders.
"Oh yes, that was a rising wedge but you forgot that Yellen did not raise interest rates".
Stop the silly talk: the main premise of TA is that fundamental analysis is not reqired. If it is, then TA is useless.
Learn how to behave and watch you lang. Here is not your bathroom.
Actually the early eighties, with CANSLIM: price action, fundamentals, "market tone". And, before that, to some extent, Gerald Loeb.
Because retail traders are not investors and generally don't have the capital to trade fundamentals and hold through huge drawdowns before their thesis is finally proved correct. (Read "The Big Short" for an example of fundamental analysis being spot on, but a year or two too early.) For short term trading and day trading, NOTHING beats technical analysis for providing a framework of low risk, high reward setups.
99% of retail traders don't lose because they use technical analysis and/or indicators; they lose because they have no idea how to conduct statistical analyses (or no work ethic to do so) and/or no idea how to think in terms of probabilities once a statistically sound plan is developed.
Correlation does not equal causation.
99% of retail traders don't lose because they use technical analysis and/or indicators; they lose because they have no idea how to conduct statistical analyses (or no work ethic to do so) and/or no idea how to think in terms of probabilities once a statistically sound plan is developed.
Correlation does not equal causation.
Technical Analysis is what one uses to trade--Period. --Especially day trading. Fundamentals are useless in day trading--even the poor souls who think markets range are using TA. Marketsurfer Is not daytrading-- in fact he doesn't trade at all. He is making longer term plays that do not necessarily require price analysis. He commits a small amount of capital to each entry. Folks, that's investing, not trading. The small amount of capital substitutes as a stop loss.
Brother B1S2, you can tell 'em this over and over, and they still won't do what it takes to learn and believe you.
Ain't it crazy??
+1
Its a marketing tool by software companies (e.g. chart programs, broker trade platforms). Simply, much easier to attract new clients via promoting technical studies, backtesting tools than any other trading tool.
Yet, in the past year, I've seen more software companies spend more money advertising trading tools involving news, fundamentals, economic, money management resources as extras with the purchase of the software or new accounts at a broker. Yet, technical studies still remains as their primary marketing tool to attract traders.
In addition, most trading forums in many ways do the same inadvertently. Seriously, the most popular threads involve technical studies and are often the most moderated threads. In contrast, other threads tend to be LESS moderated due to less interest. In addition, trading forums sponsors (their advertisements at the forum) promote technical studies heavily.
My point is that retail traders are constantly bombarded with resources about technical studies and that explains why retail traders tend to navigate towards technical studies as their primary trading tool and along with the fact its instilled in us that we need "access" to charts to be able to trade or see the progress of our trades even if we don't use technical studies.
For example, when I logged into Elitetrader.com today, I see a BIG RED add on the left by Ninjatrader Brokerage. It has a laptop with charts and technical studies on the charts. Than the add talks about super tight spreads and commissions. I bet that AD would be less interesting to newbie traders if it didn't contain an image of the laptop with charts and it only talked about tight spreads and commissions.
Regardless, as mentioned above, we're seeing more advertisements about OTHER trading tools that have nothing to do with technical studies...that's a good thing because I'm a strong believer that successful trading involves more than just entry/exit signals.
I personally would like to see more advertisements by psychologists, risk managers, computer companies, tax accountants, universities that have trading classes/arcades, trading careers, internships and many other resources for traders.