It takes the average person more than 7 years to become an expert in technical analysis when using real money to trade. I think you did not try very hard and you are looking for arguments to justify that.
Ok guys, you are right. I will go back to drawing board and I will wait a few more years. Have a nice weekend and all the best.
I think a large part of the reason TA works and actually works pretty well is that so many people, including many institutions and automated traders use it, that it becomes a self-fulfilling prophecy. Think about it, if enough people/systems are looking at a price reversal at the same or similar point and have potential orders at those points it will in effect cause the reversal. Example: Suppose XYZ stock made a 52 week high 2 months ago of $45. Then it dropped dramatically and is just now getting close to retesting that high. TA principals will say that there is a lot of "supply" at that $45 level so practically every TA follower or automated system will be waiting to short or sell to cover at that point, there by artificially creating the supply level even if there wouldn't have otherwise been one there.
I believe it takes the average person 57 years, 2 months and 4 days to become an expert in technical analysis when using real money to trade.
Thank you for starting the thread. This summary comment on your views and experience is interesting to read. Modern trend summary comments, from my orientation, began to appear around 1790. This makes for a lots of good reads and allows a person to follow the path of the iterative refinement of trand consideration. Today there are a range of views on how the market works. there is also a definte pattern of how discussions go as participants either share or criticize. I take most contributions at face value and most critiques as just off the cuff and not too thoughtful. I'm not criticizing your viewpoint and its components. People who read other's work over the years usually can locate them on the spectrum and how far they have travelled. I've been trading about 18 times longer than you have been assembling your current viewpoint. It is very easy to make a lot of money trading in markets. How much is made is unbelievable and astonishing to most people. I believe the correct view of how market's offer and people take is proven by a critical thinking process. Many people do try to construct proofs ofthe market system of operation and most proofs do not work out. Criticism of another person's work is just a criticism. By conducting a reasoned dialogue among interested parties, it is possible to move the trading culture forward on sound footing. Could you give your comments on this reading? Foundations of Technical Analysis: Computational Algorithms, Statisitical Inference and Empirical Implementation. It appeared in the Journal of Finance, August 2000. Maybe if some common neutral turf develops, then some forwarding might occur.
I totally agree. This in my opinion is probably one of the major reasons why TA works in many instances. I believe statistically speaking the probability of a certain event occurring like a bounce of a trendline or a retest of the highs, like in the example above, can be influenced by everyone who uses TA and is "seeing" the same thing, thereby placing similar orders close to each other acting as price "walls" if you will. Obviously i do not have statistical proof but i've seen authors make attempts and have shown some higher success ratios on certain patterns for example. Albeit sample size is always usually only a few hundreds.
TA patterns work 100% of the time.It could be usefull though to identify wich ones stronger then Fibo lines and in what circumstanses..Volume adds up,obviously.
while someone seeing the same thing it`s exactly the moment when ETes(ExtraTerrestrials) starts to unload their positions to those who influence