After thinking a while I decided to categorize elements of technical analysis and invite others to discussion.
We have such elements of technical analysis.
1. Real elements (factual):
- price
- volume
- levels of orders (supply/demand, resistance/support etc.)
2. Self fulfilling prophecy elements (so many people uses it, that it may work)
- Fibonacci
- Pivots
- Trend lines
etc.
3. Synthetic elements based on real elements. Only after price and volume changes, these elements will show new values.
- Stochastic
- RSI
- Volume oscillator
etc.
Today's price action from Crude oil market and then commodity complex like CAD JPY was caused by rumors of new freeze talks in May and no elements from group 2 and 3 will help to act on it. Only elements from group 1 will help. In other times, where there are no strong drivers, rest of elements will be helpful.
We have such elements of technical analysis.
1. Real elements (factual):
- price
- volume
- levels of orders (supply/demand, resistance/support etc.)
2. Self fulfilling prophecy elements (so many people uses it, that it may work)
- Fibonacci
- Pivots
- Trend lines
etc.
3. Synthetic elements based on real elements. Only after price and volume changes, these elements will show new values.
- Stochastic
- RSI
- Volume oscillator
etc.
Today's price action from Crude oil market and then commodity complex like CAD JPY was caused by rumors of new freeze talks in May and no elements from group 2 and 3 will help to act on it. Only elements from group 1 will help. In other times, where there are no strong drivers, rest of elements will be helpful.
Cut short your losses. Let your profits run on. David Ricardo (1772-1823)