Why does anyone take technical analysis seriously?

Sotnis · Sep 30, 2015

Every day I'll see a story on a legitimate website like Marketwatch with an eye-catching headline saying "Why we're bearish on ABC stock." I'll open the article and it will have a bunch of confusing charts and graphs and state something like "We are clearly entering a double cross heads and shoulders evil death pattern, proving this stock is going to tank soon."

Why do some people actually base their investing decisions on technical analysis? From my own long experience it doesn't mater THAT much.

zdreg · Sep 30, 2015

Sotnis said:
Every day I'll see a story on a legitimate website like Marketwatch with an eye-catching headline saying "Why we're bearish on ABC stock." I'll open the article and it will have a bunch of confusing charts and graphs and state something like "We are clearly entering a double cross heads and shoulders evil death pattern, proving this stock is going to tank soon."

Why do some people actually base their investing decisions on technical analysis? From my own long experience it doesn't mater THAT much.

it is for the same reason that people go for gypsy tea leaf reading.
http://www.nytimes.com/2015/06/06/n...rtuneteller-now-his-fortune-is-gone.html?_r=0

RedDuke · Sep 30, 2015

Sotnis said:
Every day I'll see a story on a legitimate website like Marketwatch with an eye-catching headline saying "Why we're bearish on ABC stock." I'll open the article and it will have a bunch of confusing charts and graphs and state something like "We are clearly entering a double cross heads and shoulders evil death pattern, proving this stock is going to tank soon."

Why do some people actually base their investing decisions on technical analysis? From my own long experience it doesn't mater THAT much.

It depends on your definition of TA.

Zestilio · Sep 30, 2015

Technical analysis works because people believe in technical analysis.

qxr1011 · Sep 30, 2015

Sotnis said:
Every day I'll see a story on a legitimate website like Marketwatch with an eye-catching headline saying "Why we're bearish on ABC stock." I'll open the article and it will have a bunch of confusing charts and graphs and state something like "We are clearly entering a double cross heads and shoulders evil death pattern, proving this stock is going to tank soon."

Why do some people actually base their investing decisions on technical analysis? From my own long experience it doesn't mater THAT much.

interestingly enough on the street TA pulled usually in the moments of market going down

why is that?

because inevstors should never short and FA is mostly designed for long positions or to determine the areas where to sell the position

but when market going down you have to hold to something especially if you long on something

that the role of the TA on wall street

street does not understand TA, dooes not believe in it, and use it mostly as straw to hold on to in period of downtrends and to give some moronic explanation to clients...

TA works of course, but do not look for working TA on the street, not in their hands...

Laissez Faire · Sep 30, 2015

Sotnis said:
From my own long experience it doesn't mater THAT much.

Okay. Good to have that out of the way. Lol.

Eddiemorra · Sep 30, 2015

what do you suggest for intraday trading? Just 'reading' the ladder/Dom/orderbook?
cheers

lawrence-lugar · Sep 30, 2015

Sotnis said:
I'll see a story on a legitimate website like Marketwatch with an eye-catching headline saying "Why we're bearish on ABC stock." and state something like "We are clearly entering a double cross heads and shoulders evil death pattern, proving this stock is going to tank soon."

Everything is crystal clear in hindsight. and the past generally repeats itself -- that's why those cute chart pattern names exists.

There's generally 'more than meets the eye' in trading.

that's why these debates are kind of endless.

I've said it many times before: the Markets are Part art, Part science. no two days or situations or scenarios or people...are really ever alike or the same.

debitspread · Sep 30, 2015

If TA "worked," there wouldn't be dozens of threads on ET debating it. Its users' results would speak for themselves.

Handle123 · Sep 30, 2015

debitspread said:
If TA "worked," there wouldn't be dozens of threads on ET debating it. Its users' results would speak for themselves.

I bet when Price bars came out in 1700s and for next 200 plus years 99% said it doesn't help either, comes down to accepting and what works for you. I have always found TA is much easier to code than just price. Fibs work cause so many people doing it, but it doesn't have any magical reasons, if 400k orders comes in to sell right now cause of a fib number in ES, I doubt 400k buy orders coming in as they stand on side and wait for all the selling to get done. TA for me just makes it easier, I don't have to think as much, but I am very good for what I do with Price Charts anyway, but moving averages clearly show to me retracement areas of where others are waiting for price to come to, but it no magic area, and just like Price patterns, they work cause huge group of people think they will continue to work. And in strong trends up, monkey's have shown they select better stocks than most with darts, so their blows all the study and hours of learning how to trade at all, get a good dart throwing monkey. LOL