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Does Technical Analysis work? Open Discussion - Page 2

post #21 of 57
IMO I would have to say that there are two types of technical analysis. The very rudimentary (yet highly effective) type. This type of TA is simply using price action, volume, and trendlines. The other type of TA is the more complicated type of TA (which can be just as effective) which includes using nearly every indicator known to man. Although these indicators really are just showing what can already be seen, they add confidence to some traders, which can also be the downfall of same trades seeing as how one may become more biased based on that fact.

The reason the simplest form of TA is so effective is because nearly everyone learns it first and therefore it serves as a foundation to many.

The market is all about psychology of the masses. It works almost like a self fulfilling prophecy. Then it is up to the trader to take advantage of that and profit from it.

In short then I would have to say yes TA does work because people make it work.
post #22 of 57
Quote:
Originally Posted by sasxempire View Post

In short then I would have to say yes TA does work because people make it work.
Yep, the markets are nothing but a reflection of the reactions and expectations of people, like you and me.
post #23 of 57
Quote:
Originally Posted by StockJock-e View Post
Yep, the markets are nothing but a reflection of the reactions and expectations of people, like you and me.


Are there stocks that are completely over run by institutional investors that take away from this? It does seem like some stocks are a lot easier to predict than others.
post #24 of 57
I trade 50% TA and 50% based on the psychology of the market and direction i feel the general market will be going.

I dont care what kind of excellent numbers a company can report, if the market wants the company to go down, its going to go down. I live off TA and feel like your trading blind without it
post #25 of 57
Quote:
Originally Posted by tomkat22 View Post
Technical analysis is garbage. Tarot cards would be equally effective. Sorry that's as "civil" as I can be. Investor sentiment is all that matters.


I guess price is irrelevant too....
post #26 of 57
Quote:
Originally Posted by Crazed98 View Post


I guess price is irrelevant too....
I'm assuming his statement was sarcasm... if not, we need a facepalm picture in here.
post #27 of 57
Quote:
Originally Posted by Big Shurl View Post
This market is so manipulated technicals are irrelevant in my opinion. I wanted to say that so bad I actually posted this from my android while floating on vacation. See you guys in september.
Couldn't disagree more and my trades feel the same.
post #28 of 57
Quote:
Originally Posted by tomkat22 View Post
Technical analysis is garbage. Tarot cards would be equally effective. Sorry that's as "civil" as I can be. Investor sentiment is all that matters.
.... and how do you gauge investor sentiment? Technicals. I mean give me break, there's no way to go around and ask every single person how they feel about a stock. The proof is in all numbers and how those numbers are reflected on the charts.

Quote:
Originally Posted by mattman27 View Post
I trade 50% TA and 50% based on the psychology of the market and direction i feel the general market will be going.

I dont care what kind of excellent numbers a company can report, if the market wants the company to go down, its going to go down. I live off TA and feel like your trading blind without it
Exactly. Trading blindly. Never hurts to utilize all the tools.
post #29 of 57
Quote:
Originally Posted by Enickma
Quote:
Originally Posted by Crazed98
I guess price is irrelevant too....
I'm assuming his statement was sarcasm... if not, we need a facepalm picture in here.
Indeed .......

post #30 of 57
It doesn't work, period. I use my magic 9 ball most of the time, sometimes I'll call Ms. Cleo and get her opinion.
post #31 of 57
Quote:
Originally Posted by tomkat22 View Post
Anybody using technical indicators searching for some magic Holy Grail is wasting their time. Those indicators only tell you what a market has done in the past...not what it will do in the future.They're all lagging indicators. TA guys operate under the assumption the tail will wag the dog,THE TAIL CANNOT WAG THE DOG! And where in my post did I say price is irrelevant? Price is the only thing relevant. If someone does discover an indicator that tells you where price is going to go in the future,even the next two minutes,we'll all be rich. Again,pure garbage.
Okay I was being sarcastic..I hope you're joking though.
post #32 of 57
I dont no......But lets find out. Pick a stock and use paper money
post #33 of 57
Quote:
Originally Posted by Addicted 2 Money View Post
I dont no......But lets find out. Pick a stock and use paper money
Will this do?

post #34 of 57
Quote:
Originally Posted by tomkat22 View Post
Believe what you want to believe,trade the way you want to trade,I'll do the same.
Then don't be so quick to arrogantly denounce sh*t. Respect peoples' trading styles.
post #35 of 57
Quote:
Originally Posted by tomkat22 View Post
Anybody using technical indicators searching for some magic Holy Grail is wasting their time. Those indicators only tell you what a market has done in the past...not what it will do in the future.They're all lagging indicators. TA guys operate under the assumption the tail will wag the dog,THE TAIL CANNOT WAG THE DOG! And where in my post did I say price is irrelevant? Price is the only thing relevant. If someone does discover an indicator that tells you where price is going to go in the future,even the next two minutes,we'll all be rich. Again,pure garbage.
Dude, I feel this way a lot, BUT, its not so much about what the indicators are telling you IS going to happen but what will probably happen based on "probability". You just have to be right more than you are wrong for net gains. And this can be achieved by using the TA, ignoring your emotions, and proper money management in every trade.
post #36 of 57
Quote:
Originally Posted by tomkat22 View Post
Price action tells me everything those LAGGING indicators do,so why the hell would I even want to look at them? For entertainment? I can think of better ways to waste my time.
Guess you didn't know that those indicators use formulas to interpret price action...
post #37 of 57
Quote:
Originally Posted by tomkat22 View Post
Technical analysis is garbage. Tarot cards would be equally effective. Sorry that's as "civil" as I can be. Investor sentiment is all that matters.
You realize that this is what TA shows right?
post #38 of 57
Quote:
Originally Posted by sasxempire View Post
IMO I would have to say that there are two types of technical analysis. The very rudimentary (yet highly effective) type. This type of TA is simply using price action, volume, and trendlines. The other type of TA is the more complicated type of TA (which can be just as effective) which includes using nearly every indicator known to man. Although these indicators really are just showing what can already be seen, they add confidence to some traders, which can also be the downfall of same trades seeing as how one may become more biased based on that fact.

The reason the simplest form of TA is so effective is because nearly everyone learns it first and therefore it serves as a foundation to many.

The market is all about psychology of the masses. It works almost like a self fulfilling prophecy. Then it is up to the trader to take advantage of that and profit from it.

In short then I would have to say yes TA does work because people make it work.
post #39 of 57
Quote:
Originally Posted by tomkat22 View Post
Price action does that just as effectively. All indicators are just derivatives of price action so why even bother looking at them? I glance at the 20 day MA occasionally but that's about it.Anybody who puts faith in any of those other so-called indicators is just waisting time.
how do you study price action alone? Serious question.
post #40 of 57
Me:
I only use TA.
I only trade (intraday/swing).
I never look at FA (very few exceptions).
I never invest (very few exceptions).

I am averaging 89% positive trades this year (over 2500 trades this year). I think I have fine tuned my system to work well for me. If I had fine tuned FA to make me 89% winning trades I would have went that route. I like charts because the parameters can work on all stocks where as the same FA DD does not (tech, pharma, whatever). They all have different products/earnings/etc that is hard for me to keep up with let alone allow me to make 30+ trades a day. I can be a generalist and a specialist at the same time.

Caveat: If we are talking penny stocks, I feel relying strictly on TA can be too much of an oversimplification.
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