Technical Analysis? I’d rather pick tarot cards lmao 😂
You can’t convince me that Technical Analysis works. Kids thinking that Price Action will make them money lol 😂
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While it doesn't always work, remember that no system always works. It's a probability game and more often than not, TA works.
End of the day, follow proper risk management, stay in the game for longer, don't mix emotions and pray for the best. I have seen both kinds of people changing their fortunes for better and worse, following TA.
I disagree.
Here’s why. Very few people end up making money because of risk management. ~2% people perhaps.
Rest are unable to hold trades because of emotionality/lack of knowledge about underlying derivative.
Ideally, trading being zero sum should exhibit a Gaussian distribution with breakeven at 50th percentile. But instead it shows a power law, as exhibited by the above rationale.
What TA does, is allows you to hold trades without emotionality and allows proper risk management. E(X) improves from Loss to Breakeven. That’s it.
If you would run a random walk experiment then also breakeven is the likeliest outcome.
Conclusion: TA does not work. Risk Management allows you to stay in the game longer, allowing you to breakeven as an expected outcome. Rest is all luck, unless there is some lead lag relationship or some information asymmetry that has not been caught by the rest of the market.
Then, the strategy becomes obsolete because of EMH.
Are you talking about TA being ineffective or people following TA can't make profits? Cos the latter is true but former is not entirely. Your ability to make money out of a system (TA) is not just dependent on TA but factors such as mentality, poor execution, wrong capital/strategy deployment and wrong instrument.
The masses usually do options and it's a game designed to lose. You not just need the movement in your direction, but you need that fast, you need other factors working your way too(eg:- VIX). Still, I know people who made bucket loads in option BUYING.
I also blame information asymmetry.
It works and it also doesn’t work. Depends on your system and risk management, it had worked for me consistently , at times when it has gone into drawdowns, is when I was too greedy and didn’t manage my risk
Hmm, to each their own. Information arbitrage is the only way
To each their own - fine, but it is a well known fact that the 1-2% who know their craft well in technical trading actually make money, consistently. Its not a bull market phenomenon, there are loads of technical traders all over the world. Read about HFT, algorithmic trading etc. Looking at bull market retailers and influencers are not a good sample size to conclude of technical trading works or not.
Doesn’t work in day trading, but definitely works in long term investing and swing trading. That’s what worked for me.