What information does Technical analysis tell you ?

Discussion in 'Technical Analysis' started by etrades, Dec 23, 2019.

  1. etrades

    etrades

    Hi guys,

    I want to ask what information does Technical analysis give you as a trader ? I am looking to understand the meaning of technical analysis. Hence, I am NOT asking what signal does (buy or sell) TA give you and how and NOT asking which indicator means what ?

    In the raw form, I want to understand what is collection of information that technical analysis provides (which then can be used for further interpretation and signal) without any links to any particular indicator or method.

    So, a sample from you answer may look like:

    When I do TA, it gives info such as below about the market (let us for a particular share called UL):

    - there is lot of buying happening in UL
    - buyers expect a higher EPS in the earnings report.

    or something like that.

    In asking this question I am trying to understand how fundamentals manifest in TA. What does TA actually tell you, rather than what signal to interpret from what TA is showing.
     
  2. tommcginnis

    tommcginnis

    T/A provides a number that summarizes either of price, volume, or both, for the market under evaluation, according to the user-specified parameter choices.

    However, the question you pose expects an interpretation, not an empirical summary.

    No can do.
     
    murray t turtle, Nobert and Sprout like this.
  3. dozu888

    dozu888

    darn OP if you posted this a few months earlier I could have given a better answer..

    due to my other businesses I know UL well and actually bot a bunch before KHC wanted to buy... of course I was happy with the lucky windfall profit, but in the following months while KHC quickly faded from the initial pop and went into free fall, UL was jacked up there as if the merger wasn't dead.... I think I sold it at the top tick, but I don't remember some other details related to the story as it was many months ago.

    forget TA... in trading you just need to unfold stories, it's more like situational analysis.... of course you need to see the price... but drawing lines and shit is just waste of time.
     
    syamrajk and metatrader54 like this.
  4. wartrace

    wartrace

    It tells you what happened "x" periods ago?
     
    murray t turtle likes this.
  5. imjohn

    imjohn

    :rolleyes:

    Since joining the forum in early '18, feel like I've seen dozu888 talk "waste of time" on every trading thread. So I wasted the last several minutes of my own time on a dozu "waste of time" search.

    Come on, guy... you're sounding like a broken record.

     
    guowei58, syamrajk, yc47ib and 13 others like this.
  6. *Facepalm*

    No those lines are extremely helpful. When you know where your support and resistance is then you can trade better.

    Did I really just have to explain that???
     
    tommcginnis and SimpleMeLike like this.
  7. dozu888

    dozu888

    support/resistance is a myth.
     
    lovethetrade and murray t turtle like this.
  8. dozu888

    dozu888


    have you thought about this possibility.... perhaps, if traders actually abandon everything i call waste of time, perhaps their success rate could be higher?
     
  9. Yeah, ok buddy, have a great day...
     
    abotarga and tommcginnis like this.
  10. Specterx

    Specterx

    The best use of TA for what you're describing is to see when "something" has changed in a market.

    Say you see a market that has been lazily consolidating for 10 months, near the lower end of its historic range, and it probes down to a new local low. Then out of nowhere the price rockets higher in two solid green daily bars, each closing at its high, covering in two days what would be covered in two weeks of typical action during the consolidation. This type of behavior is often driven by a clear fundamental catalyst forcing a rapid re-pricing in the market, which are almost by definition the best directional trades.
     
    #10     Dec 23, 2019