Does Technical Analysis Work?

Discussion in 'Technical Analysis' started by ironchef, Oct 8, 2018.

  1. ironchef


    I came across this 22 year old paper (published 1996) that said it worked with simple rules like moving averages and breakouts (worked for Dow from 1897 to 1986 and UK from 1935 to 1994). But that was 22 yrs ago. Do they still work today?
    murray t turtle and tommcginnis like this.
  2. PistolPete


    Maybe for 5% of traders but it wont be any of that generic shit in this modern world . TA can be anything you want if you are skilled but for most they have ZERO choice but to use crapola subjective voodoo

    This thread is a troll really and nothing useful will come from it . Naysayers will want proof and those that really can give it certainly wont . Ever tightening circles ending in insults and extreme ego
  3. It's a scam.
  4. Buy1Sell2


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  5. The market operators know how it works. :sneaky:
    They can use it to their advantage.:mad:
    Linda Raschke on TA...
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  6. As you are.
  7. I didn't bother to open the article, I'll admit.

    Technical analysis can be many things. There's no doubt that there are technical patterns in the markets (and these may wary from markets also) that can be exploited. Identifying which pattern or sequence which is in play during a live market AND trading it is of course not easy.
  8. Looking for trends in day trading, especially in the US during the afternoon can be challenging to say the least.

    Technical analysis in the right context and combined with other methodologies can be useful, however. It is helpful for one to be able to anticipate or determine likely support and resistance areas as they are happening rather than waiting for it to happen. Waiting for a bar breakout to buy off of apparent support and waiting to sell a bar break off of apparent resistance in day trading is leaving a lot of money on the table. Automatically buying near intraday resistance or shorting near intraday support in anticipation of a breakout, especially in the afternoon is likely to impair one's intraday trading results in the long term.

    Too many people draw their lines on a chart after the pattern has already developed. Looking at old charts is useless in my opinion because context is not available. Wannabe technicians are better served by drawing their lines off the rightmost bars on their charts and considering context. By context, I mean money flows and relative performance between assets, key events, significant pending scheduled events, time of day, and current price relative to the daily and weekly open.
    SimpleMeLike likes this.
  9. tomorton


    The biggest change in private retail trading in the markets since 1986 and 1994 has been the opening up and rise of day-trading. New traders today don't consider any other approach. They certainly try to show me they believe long-term trading is not really trading. Intra-day TA is ambiguous and day-trading as a style is ferociously difficult, it is no wonder that 90% of new traders fail when 99% of new traders start as day-traders. Since they all think they're good at TA and they buy into the TA is easy and 100% reliable model, its no wonder that today we are told TA doesn't work.
  10. tomorton


    My interest these days is with who says TA doesn't work and why they say that: whether it does work or doesn't work isn't a question for me any longer. But if there's any doubt whether the simplest trend-following strategy might work, take a look at the last 6 months on AUD/USD, Silver, the Dow, easyJet, Pfizer, Merck, etc. etc. Its hard to see how it would be possible to avoid making money on these in that period.
    #10     Oct 9, 2018