Why Do Most Retail Traders Favour Technical Analysis ?

Fundlord said:
It seems that retail traders are heavily in favour of technical trading strategies.

Every advertisement aimed at retail traders is "learn fibonacci", "master price action" "trade pullbacks/patterns" etc.

I have not once seen "learn how to analyse fundamentals of countries, companies and make money"

Is it because its less work to learn TA and its sold as somewhat of a "get rich easy by trading" ?

This begs the question can a retail trader get an edge based on fundamentals without all the fancy Bloomberg terminals and a 100 analysts working for you ?

Finding mispriced assets based on a sudden discovery of information before everyone else ?

Everyone has been coming up with fundamental analysis theories about greece which had me thinking can you really gain an edge by reading a few articles from Bloomberg, Reuters, WSJ, maybe watch a few economic reports and connect the dots before others ?

I remember reading somewhere that if you spend 10 minutes reading a financial times you have wasted 7 minutes.

Im talking about global macro products like index futures, FX, bonds, commodities not individual equities.
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trading is a speculation on the price, hence the use of TA

investing - the speculation on the value - hence the use of FA

QA can be used for both, depending which data to be used

the average (if not to say most) retail customer (i do not called them neither traders nor investors since they have no clue what they r doing) does not know how to use neither TA nor FA... and those who do, some day will realize that they confuse analysis with the method

what is the difference? :

the method of trading (or investing) is about managing the risks, that's why the best analysts (either TA or FA) - lousy traders or investors: just analysis is not enough... :)

why TA is pushed in retail brokerage more than FA ? because it allows to trade on lower time periods those trading more frequently and therefore generating more commissions for the brokers

What should average (if not to say most) retail customer learn ?

Imho they should learn how to pray...
 
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R
qxr1011 said:
trading is a speculation on the price, hence the use of TA

investing - the speculation on the value - hence the use of FA

QA can be used for both, depending which data to be used

the average (if not to say most) retail customer (i do not called them neither traders nor investors since they have no clue what they r doing) does not know how to use neither TA nor FA... and those who do, some day will realize that they confuse analysis with the method

what is the difference? :

the method of trading (or investing) is about managing the risks, that's why the best analysts (either TA or FA) - lousy traders or investors: just analysis is not enough... :)

why TA is pushed in retail brokerage more than FA ? because it allows to trade on lower time periods those trading more frequently and therefore generating more commissions for the brokers

What should average (if not to say most) retail customer learn ?

Imho they should learn how to pray...
More...
eall
qxr1011 said:
trading is a speculation on the price, hence the use of TA

investing - the speculation on the value - hence the use of FA

QA can be used for both, depending which data to be used

the average (if not to say most) retail customer (i do not called them neither traders nor investors since they have no clue what they r doing) does not know how to use neither TA nor FA... and those who do, some day will realize that they confuse analysis with the method

what is the difference? :

the method of trading (or investing) is about managing the risks, that's why the best analysts (either TA or FA) - lousy traders or investors: just analysis is not enough... :)

why TA is pushed in retail brokerage more than FA ? because it allows to trade on lower time periods those trading more frequently and therefore generating more commissions for the brokers

What should average (if not to say most) retail customer learn ?

Imho they should learn how to pray...
More...

Really? What makes you such an expert?
 
qxr1011 said:
trading is a speculation on the price, hence the use of TA

investing - the speculation on the value - hence the use of FA

QA can be used for both, depending which data to be used



Imho they should learn how to pray...
More...

Speculation on the words!
 
countercountertrend said:
Honestly I'm not that experienced, I'd say 6.5/10 for psychology because I have a very long way to go. My mental state during trading is not as consistent as I would like. But improving my psychology is what took me from being a losing trader to being able to manage consistent profits even though I still make a lot of mistakes.
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One of my TA systems is to counter trade against a counter-countertrend method. Sometimes it works quite well!
 
Lol, fine. The ones that i know all do (about 20 guys or so).

In addition, the grandmasters themselves, Soros and Druckenmiller, both use charts and have used technical methods in the past (whether they are still doing so, i don't know, but a pretty good bet to say that they are).
 
Which reminds me that in his book, Alchemy of Finance, George Soros said he couldn't figure out where the deutschemark was going, so he decided to let the market tell him and started looking for patterns (tech analysis!) on the chart.
 
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