Please convince me that technical analysis works

[FX4Newbies]

Price goes up, you buy. Price goes down, you sell. Any child can tell you. And set a SL, and depending on your expectations a PT. Forget about TA. Total waste of time.

Sorry you feel that way about TA. Maybe the methods you have seen or are used to, have no connection on a consistent basis IN ADVANCE to what the price is doing or actually does. I have experienced that consistency for far too long to believe otherwise.

All the best to you.

 

[FX4Newbies]

Just wanted to add...

When Newbies and traders are trying to find their way, Technical Analysis (TA) can seem like utter foolishness, because it just doesn't seem to work. I was discouraged from using the Andrews Pitchfork many years ago, because I was told it didn't work. I ignored the comment and pursued learning it correctly anyway. The rest is history...it works GREAT and is now part of my arsenal!

When you begin to understand how the price moves, and you begin to use tools on the platform correctly, all of a sudden, things begin to make sense. From there, a trader will begin to sing a different tune about TA. Once again, beware of all the free online trading info... because if you don't have a solid and correct understanding first, you are already in BIG trouble. Having knowledge without proper understanding can be even more dangerous than not having the knowledge at all.

Not everything being touted online is based on correct usage and application...and understanding of the market. As my father used to say, "Good isn't good enough if better is available." You have to determine the precision YOU are looking for from your own trading and pursue it! And that's why, as I stated before, my trading method has not changed for 12+ years, and I can use it for any style of trading (Swing, Intraday, Scalping etc.), any market (Stocks, Commodities, Forex etc.) and on any time-frame. It works for me and provides what I believe a method should provide.

Every trader needs to find that sweet spot for them, but they should start on the correct foot, otherwise they'll probably take Y-E-A-R-S to figure out market basics, with unnecessary headache and heartache that could have been avoided.

 

[pstrusi]

Unfortunately, Technicals don't add more value than tossing a coin. For many years, I thought having a little better chance could be possible by using several, but eventually, it'll crush you.

 

[FX4Newbies]

Unfortunately, Technicals don't add more value than tossing a coin. For many years, I thought having a little better chance could be possible by using several, but eventually, it'll crush you.

Hello pstrusi,

Maybe your understanding of how to interpret their messages in the context of the market was not complete. Very sorry to hear of your negative experiences.

One thing I will say that I have noticed especially with new traders. They go online to a popular site (won't give names), read some info there about an indicator, that if the green line crosses above the red line you buy. No reference is made to the underlying market structure. When the price reverses, they blame the indicator. If you start your car and put it in reverse by mistake, then step on the gas and crash into the wall behind you, do you blame the car?

Many traders do the same thing with Technical Analysis. Very sad indeed. For those who want to change that belief through consistently positive experiences, it is possible.

 

[FX4Newbies]

Just to make the point clearer to traders who have had bad experiences with indicators...

I remember reading a review on Amazon for a high-end blender. Most of the reviews were very positive, then there was one person who gave a 1-star rating. Their complaint was that whenever they turned the blender on, "black dust" was being produced. That told me right away that they did not lock/fit the jar properly onto the base of the blender, and the speed at which it was rotating, was actually causing the black base to grind away, very much like a sander of sorts.

Please don't bash indicators and technical analysis. Instead, try to understand how they work, what they are designed to do, and by all means, understand how the market and price action work.

 

[FX4Newbies]

Why do you think the price turned at those specific price points and at that time? What causes price to move anyway? There is really only one answer. Do you know what it is?

 

[FX4Newbies]

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Why do you think the price turned at those specific price points and at that time? What causes price to move anyway? There is really only one answer. Do you know what it is?

So...the answer to the question is because of: PEOPLE!

People move the price by buying and selling at certain prices and at certain times. Don't believe me? Look at a chart on the weekend for a currency pair (not a Crypto chart if weekend trading is allowed) from a broker like Oanda, or any broker that leaves their servers open during the weekend. The price line would very likely be flat... just a horizonal line.

So now.... why are masses of people buying and selling at specific points on the chart? They are all seeing something that is giving them a high probability trade, and that something is some form of Technical Analysis (TA). If they did it on a coin toss, they would not be consistently profitable, and there are many traders who are profitable.

The goal is to find a method of analysis that gets you into the trade at the right price AND at the right time. Either you crank out a method yourself, which takes time (trial and error with losses along the way) or you find a book (or books), an instructor, a mentor, a coach or someone along those lines who will show you the ropes, but successful trading using TA can be done. Whichever way you choose it will cost you; either in time, money or very likely, both. Just being real.