So why does technical analysis work ?

C

Czar

Guest
#1
#1
I always wondered why reading lines, bars, volume, candlesticks, moving averages work since decades or maybe centuries ?

Well I have conjured my theory that Certain very sharp person or people with lots of money developed methods to play with the retail psychology, the studied reactions over time modified plans to the reactions. Now those rules have been passed over from generation to generation to closely knit high end people & their circles. So the rules to loot the retail, the plans & strategies have always remained the same, thus over the decades people have tried to decode them thru means of TA & so that's how TA analysis remains the same as besides those initial smart guys no one added any new strategies to loot the retail...

so now all the new so called operators can do is give false break outs, etc to wave off the Tech readers. As any kind of Trade is basically a play of emotions & psychology of human behaviors & its reactions, so till some smart guys again comes up with new set of ways, enjoy....

What is your say on this ?
 
Smart_trade

Smart_trade

Moderator
#2
#2
Czar said:
I always wondered why reading lines, bars, volume, candlesticks, moving averages work since decades or maybe centuries ?

Well I have conjured my theory that Certain very sharp person or people with lots of money developed methods to play with the retail psychology, the studied reactions over time modified plans to the reactions. Now those rules have been passed over from generation to generation to closely knit high end people & their circles. So the rules to loot the retail, the plans & strategies have always remained the same, thus over the decades people have tried to decode them thru means of TA & so that's how TA analysis remains the same as besides those initial smart guys no one added any new strategies to loot the retail...

so now all the new so called operators can do is give false break outs, etc to wave off the Tech readers. As any kind of Trade is basically a play of emotions & psychology of human behaviors & its reactions, so till some smart guys again comes up with new set of ways, enjoy....

What is your say on this ?
Click to expand...
Technical Analysis works enough number of times to make it difficult to ignore it.It also fails enough number of times to make it unsafe to totally depend on it.
It is just a decision support system which gives you entry,exit on profit,stoploss etc More important is money and position management.Technical analysis gives you an edge to work with.False breakout has always been a problem.

Trade Well and Enjoy !!!!:)
 
columbus

columbus

Well-Known Member
#3
#3
Czar said:
I always wondered why reading lines, bars, volume, candlesticks, moving averages work since decades or maybe centuries ?

What is your say on this ?
Click to expand...
Yes ,too much TA may not help but some of them are good benchmarks like moving averages.
 
A

Ank!t007

Active Member
#4
#4
Czar said:
I always wondered why reading lines, bars, volume, candlesticks, moving averages work since decades or maybe centuries ?
Click to expand...
All through time, people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance, and hope. That is why the numerical formations and patterns recur on a constant basis.

- Jesse Livermore

:)

Ankit
 
C

Czar

Guest
#5
#5
Hey Ankit Wassup... see even Mr. Livermore finds it fishy... what he says are reactions but someone gotta control to make people react.... ;)
 
D

darsh_goswami

Guest
#6
#6
Well Czar,..

Technicals works , reason could be simple. All what happens in the markets , reflects in the charts. Charts suggests u what is the market interest. And that gives u the way to trade. All the news , views , opinions and fundamentals , all comes together in the charts coz PRICES SPEAKS ITSELF.

Best luck ... Being a Technical Trader , i m handicap wthout charts. not sure about others.

Regards,..
Darsh
 
B

biyasc

Well-Known Member
#7
#7
now i feel that T.A works, because it helps us to build a suitable trading system as per the chart/analysis. it defines an entry/stop/target based on the chart/analysis. if we follow the system with proper rules/disciplines then there is a high chance of sucees. but orders/trade management/execution is one of the most vital key to take care. & you all know the importance of money management/position sizing.
 
sudoku1

sudoku1

Well-Known Member
#9
#9
Czar said:
I always wondered why reading lines, bars, volume, candlesticks, moving averages work since decades or maybe centuries ?

What is your say on this ?
Click to expand...
THE first were the japanese rice traders who gave the world the amazing 'canlesticks charting' developed by them centuries before...:)
 
C

Czar

Guest
#10
#10
True Sud, but those are the decipherers, we want the planner, like there's one about some flowers trade in Europe, don't remember the exact story...
 
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