They never were profitable--- its all hindsight bias-- the pattern doesn't exist until it completed hence it "works" by default-- just don't try to trade it in real time. Here's an easy way to think about it-- if you flip a coin 10 times and get heads 10 times, are you in a heads trend? Just try to trade patterns with a simulated account from thinkorswim or another free service-- you will quickly learn the ridiculous nature of chart based pattern TA-- for anything other than descriptive pictures after the fact. there is much bad info in this biz from folks that want your money. surf PS-- i think even the supporters of TA on this site, real traders, don't use patterns but rather price action and DOM reading to make decisions.....
The idea is that it must break the breakout, once it breaks the breakout level the pattern is confirmed and there is a pre-defined stop loss and profit target. For example, in a double top, the low of the valley between the 2 tops would be the breakout level and the profit target/stop loss could be set at 1:1 taking the distance of the top from the distance of the valley's low.
wow, first time heard that hedge fund does not use TA. my friend's 1B hedge fund is based on TA, and Medallion. de shaw are based on TA, and so on..
information yes, but generally legal or grey area insider info----- not many use blatant illegal insider info-- risks are too high for getting caught today-- based on my experience-----but only the "insiders" know for certain.
Most systematic macro funds use technical analysis. Some stat arb funds probably do too. Even fundamental long/short funds will take technicals into account as they manage their positions.
The problem with this discussion is that at which point does technical analysis become quantitative analysis.