People are always wishing to profit from trading but the timeframes are different with how to achieve this. The thing is, past behaviour is no indication of future behaviour. Because XYZ stock or instrument did something in the past means diddly squat. Gotta look for new opportunities, while the majority look to the past, others are looking for something else to happen where the mob aren't looking.
Universal adoption of AI is still far off. Nevertheless, considering the pace at which the technology is evolving, that might not take that long. But remember that AI, up to this point, is limited to patterns recognition. They don't create one. It's only when they start to not only detect but actually form patterns that will truly disrupt the entire financial community.
If you want to get a license to fly a plane during clear weather, most people can do this. But if you want to be able to fly by instruments during heavy rain, most different ratings. So it is far better to be able to learn about price first, knowing patterns of trend, retracements, continuation of trend and endings of trend. Fundamentals are multitude of numbers or attitudes based on numbers of a stock or economy. Good economies, can expect good profitable, low debt stock to blossom up, so one studies what a stock does during earnings seasons and if it stock generally goes up, one could stay long and or buy more. But what happens when economy is up and so are the stock numbers, but stock tanks? Best to have answers to this question before it happens. If you don't have well back tested answer before buying this stock, shows ones' inexperience and why people fail. Biggest problems of Fundamentals is "Trust", can't trust many of government reports and so can't trust most companies as they can change how they are reporting for tax reasons or is the CEO/CFO trying to get bigger bottom line as their salary is geared to high stock prices. I only use price, trend and time during earnings season and only interested when stock going wrong way. Usually faster moves, more reliable, get in and out
For me, technical analysis gives a visual example of buying and selling pressure. Combine chart patterns with volume and it helps me to anticipate turning points. Of course, none of this is 100% accurate but it's possible to be right way more often than wrong. If disciplined enough, technical analysis also provides an opportunity to enter a trade at the most opportune time. As it pertains to fundamentals...as many have said in the past, prices move first and fundamentals come second. The idea is that whatever fundamental forces are driving markets, someone already knows that information way before it gets to you and it will show in the price before the public knows. But, if one can read charts, you're able to capitalize on this information without knowing what is going on.
1. Based on the answers, below is some of the information TA gives: - Demand from buyers - eagerness of sellers - consolidation levels - approach of big money towards particular entity. If so, then: - should TA be pretty simple to do - atleast to retrieve above information ? 2. also, many have said above it takes lot of effort gain expertise in TA. - why is that ? - what is it that you gain from your effort ? (example: is it ability to recognize patterns ? ) - if it is patterns, then will this be done by computers ? What will be in realm of manual TA after computers do widespread pattern recognition and interpretation ?
1. reversion to the mean 2. continuation of momentum everything else is most traders playground, unfortunately.
Very succinct and correct. It leads to the classification of trades as either - 1. buy - because price has been going down or 2, buy - because price has been going up
My technical analysis tells me a lot. Of course - my TA might not be the same as you're using - especially if you're only using a chart.
the biggest problem is the fundamental approach, that is once you get brain washed by 'technical analysis 101', you look at the market as a mysterious, heartless, soulless beast. to about the same degree, conventional fundamental analysis has the same problem. therefore both approaches fail to see what this game truly is - the smart money picking the pockets of the dumb, day after day. sentiment and manipulation, the 2 biggest factors driving price movement in the intermediate term, a few days/weeks/months, or in conventional terms - the swing trades, are ignored by both camps. that's why TA's fail rate is so high, because it's always several steps behind... it has to react what the price has done, many periods ago... or if you react too fast you get chopped... you can never tell if a move is true or a head fake, until it's really late; Situational Analysis (R) however, as illustrated in my thread and numerous posts, look at the pro boys moves (price and media push) in correspondence with the dumb money sentiment, gives you a clearer picture and you are rarely wrong. A true move happens at the ripe moment, just as head fakes happen when the sentiment conditions are not ready yet. this is why I keep calling TA garbage because once you experience the clarity of SA(R), conventional TA is far too inferior.
Please point me in the direction of your Situational Analysis thread.. Sounds like a different take on Wyckoff.. FYI,before retiring,I worked at what is now a 38 billion dollar fund... I was very familiar with the multi strategies employed and the various methodolgies/profitabilty.. You speak in absolute terms,and there were very few absolutes in trading... Burry said it best..Theres a way to win at everything.It just has to be found