Does technical analysis work or not?
- Thread starter babyjake1961
- Start date
- Watchers 32
RichB Trader
Newbie
- Messages
- 2
- Likes
- 0
Personally I have had some success with TA. Mainly trying to put probabilities in my favour. At 50% win rate and 2.5:1 risk reward then the outcome will be profitable. No every trade doesn’t win, but around half do and those that do win more than the losers.
The general bull market in the last year like a rising tide does float all ships but through TA I have picked some good stocks.
My question, assuming we are all traders, if you don’t use TA (and it seems most people don’t like it on this forum), what do you use? Fundamental? Buy and Hold?
The general bull market in the last year like a rising tide does float all ships but through TA I have picked some good stocks.
My question, assuming we are all traders, if you don’t use TA (and it seems most people don’t like it on this forum), what do you use? Fundamental? Buy and Hold?
TA works, but as a pare of a structure or a bigger analysis plan. because the market is a very dynamic and complicated place an analysis should relay on several tools. I for example use FA and Bookmap to validate the TA I've done in a stock.
NVP
Guest Author
- Messages
- 37,936
- Likes
- 2,144
babypips perhaps ? .............i got banned as well .....long story ! .........N
Bill Signer
Junior member
- Messages
- 17
- Likes
- 5
interesting discussion... I use to see past results (figures etc) - but almost never predict it in forward trading... so, for me it's hard...
According to me, technical analysis does really work. it refers to the past performance of the exchange rate trend of the foreign exchange market, using technical analysis tools to predict the future trend of the exchange rate and determine the predictive analysis method of the market entry and exit strategies. It is aimed at predicting the future trend of market price changes, using the graphs, charts, forms and indicators of market behaviour (price and trading volume of the foreign exchange market) as means, using theories of mathematics, statistics, and price to market behaviour. Analytical studies conducted. if you really want to become a successful trader in the forex market then you should follow some strategies and forex tips that will help you to make a more future profit.
J_C_Anderson
Active member
- Messages
- 133
- Likes
- 25
To my mind, technical analysis works perfect. The great thing is that it works all most the same being applied to different instruments including stocks, futures and other. Sometimes it even seems that there is something else then psychology behind the chart patterns - maybe, it is math. Trendlines, for example, work even at weather charts or any other charts.
We alwayes say "technical analysis" but in fact includes several subdivisions like chart pattern analysis, candlestick pattern analysis and indicator-based analysis. As for me, the most useful among all is chart pattern analysis dealing with such well-known figures and patterns like trendlines, triangles and other. It could be applied at any market or timeframe and its accuracy is very high. Candlestick analysis could provide interesting information too, but I`ve spotted that only few candlestick patterns actulally work, and they are not from the list of most popular ones. Another important point is that it works only in connection with chart pattern analysis which gives broader understanding of the situation, so candlestick analysis is mostly supplimentary tool to get additional confirmation. Since all indicators are the derivatives of the price and volume, they could be used as an additional tool too. For sure, there are some indicator-based strategies build entirely on the signals provided by indicators, and their efficiency sometimes even proved by testing on historical data with the special software like Forex Tester, but to my mind it is better to use them only as one of the elements of the trading strategy based on other principles. For example, 9 EMA could be used to confirm the trendline breaching on 15M chart. Another great indicator (for stocks) is VWAP, which helps to understang the situation in general and sometimes acts as support or resistance levels.
Thus, techncial analysis used properly could be a great tool, even if your are fundamental analyst.
We alwayes say "technical analysis" but in fact includes several subdivisions like chart pattern analysis, candlestick pattern analysis and indicator-based analysis. As for me, the most useful among all is chart pattern analysis dealing with such well-known figures and patterns like trendlines, triangles and other. It could be applied at any market or timeframe and its accuracy is very high. Candlestick analysis could provide interesting information too, but I`ve spotted that only few candlestick patterns actulally work, and they are not from the list of most popular ones. Another important point is that it works only in connection with chart pattern analysis which gives broader understanding of the situation, so candlestick analysis is mostly supplimentary tool to get additional confirmation. Since all indicators are the derivatives of the price and volume, they could be used as an additional tool too. For sure, there are some indicator-based strategies build entirely on the signals provided by indicators, and their efficiency sometimes even proved by testing on historical data with the special software like Forex Tester, but to my mind it is better to use them only as one of the elements of the trading strategy based on other principles. For example, 9 EMA could be used to confirm the trendline breaching on 15M chart. Another great indicator (for stocks) is VWAP, which helps to understang the situation in general and sometimes acts as support or resistance levels.
Thus, techncial analysis used properly could be a great tool, even if your are fundamental analyst.
Similar threads
- Article
