Is Technical Analysis BS? | Forex Factory

  • Is Technical Analysis BS?

    From topdowncharts.com

    Is technical analysis BS? To save you time, my answer is: Yes, No, and Maybe. There are a lot of misconceptions and misunderstandings when it comes to technical analysis. It's not uncommon to see it treated with derision (hence the title), and dismissed and discarded. But is that behavior justified? My own research company, Topdown Charts, is sometimes mistaken for a technical analysis shop. I’d say first of all that I will use any and all factors relevant to forming a view, including technical analysis. I’ve also spent a lot of time studying technical analysis (e.g. CMT program via the MTA). Even then though ... (full story)

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Mingary
Jan 23, 2017 11:38pm
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Quoting cliffedwards
Are you taking the piss?
Is that how you make decisions/ conduct analysis.. No.

come on mate.. I expect better
You raise the bar pretty high, don't you (:

The retail forex market cannot function if the majority wins.
Find something that the majority does not have.
Keep it to yourself..
If / When it stops working, sell it on ebay for 29.95 (:
What is common is the bulk of the iceberg, this is TA
The first mistake is to follow the rules of TA
The second mistake is to use TA in a non traditional way
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Calculus
Jan 23, 2017 2:59am
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Everyone trades from the chart, whether they look at one of not. If they don't look at one the image is in their minds.

Same with the numbers, everyone is trading nothing but a number. People might think they're buying say Microsoft because it's got good fundamentals going forward but as soon as they go long, they've bought a number and that number often plays games with them.
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Calculus
Jan 23, 2017 5:34am
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Mingary, you detract too much I think about retail traders.

Yes, many of them are clueless but also many that work within the institutions are equally as bad at trading. They can just disguise the fact via working the bid-offer and all the other fees they charge.

Emotions and psychology are what get most people in this game and just because someone works within an institution doesn't make those factors go away. In fact if anything they're even more fierce because of the need to make money and protect their jobs.

So is TA bad? Yes, if you use it in the traditional sense, but far from it if you use it to track the emotional/psychological problems the majority are faced with. That's its key.
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Calculus
Jan 23, 2017 8:29am
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Nothing Cliff, but most of the Algo stuff is electronic market making which is a) nothing to worry about for most traders, and b) is actually good news because it tightens the bid-offer and offers generally more liquidity.

People complain if/when the Algo market makers pull their orders in times of stress which is exactly what the human market makers used to do.

And what works for institutions is fees (legal and illegal) from money under management, not necessarily trading profits (for their clients).
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mades
Jan 23, 2017 2:54am
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A sort of click-bait article. In short, math indis are ok, S/R zones, trendlines, waves not so much, astrological tools are BS.

What article fails to mention is, that in case of trendlines or S/R zones, they are drawn based on past so it's not so subjective as article would like to say.
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Ojiego
Jan 23, 2017 7:48am
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LOLz, Retailers lose using TA because they do not know how to implement TA!

I was on U-Tube the other day and a guy was "teaching" Candlesticks ... This guy does not know the fundamentals of a candlesticks. Ok, he had difficulties pronouncing "Marubozu" but calling a candlestick hammer on a rally is a no-go!(what about the Hanging-man or shooting star?...lol) In fact, there are so many misunderstandings on TA out there you will not believe it. Whether it is done on purpose remains on every trader to decipher.

Goodluck Everyone!
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Mingary
Jan 23, 2017 4:49am
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1) Retail traders use TA
2) Retail traders lose money trading
3) therefore TA will make you lose money.
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cliffedwards
Jan 23, 2017 4:58am — Edited
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Quoting Mingary
1) Retail traders use TA
2) Retail traders lose money trading
3) therefore TA will make you lose money.
Are you taking the piss?
Is that how you make decisions/ conduct analysis.. No.

come on mate.. I expect better
Reply
cliffedwards
Jan 23, 2017 7:39am
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Quoting Guest
Your expectations have failed you, your failure is complete... Now join me on the dark side of Forex trading where we know all that technical indicators simply lag behind current price and together we will rule the galaxy.
You moron.
I was referring to the LOGIC behind @mingarys statement.
NOT the SUBJECT on which he was commenting.
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cliffedwards
Jan 23, 2017 8:21am
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Algo trading has grown exponentially in fx institution trading over last 5 years.
Institutions do what works. Since that is predominantly TA based, I dont understand the question or the references to the minor issue of retail Fx trading in the overall market.
What am I missing/
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cliffedwards
Jan 23, 2017 9:06am
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Quoting Calculus
Nothing Cliff, but most of the Algo stuff is electronic market making which is a) nothing to worry about for most traders, and b) is actually good news because it tightens the bid-offer and offers generally more liquidity.
People complain if/when the Algo market makers pull their orders in times of stress which is exactly what the human market makers used to do.
And what works for institutions is fees (legal and illegal) from money under management, not necessarily trading profits (for their clients).
Fair points. Thks.
However MMking is long been algo driven for tech reasons... as T think youll know..
But my experience is that the real recent growth has been outside this area.
Fees yes. remember Greenspans story how as a junior, on Citi board asking how Bank made so much from Fx when it was a zerosum game.. and being told just that.. LoL
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sylvin
Jan 23, 2017 4:13am
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technical is place where every traders can place their blame to.
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Trader#B27F
Jan 23, 2017 5:12am
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Quoting cliffedwards
come on mate.. I expect better

Your expectations have failed you, your failure is complete... Now join me on the dark side of Forex trading where we know all that technical indicators simply lag behind current price and together we will rule the galaxy.
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Trader#A1DE
Jan 24, 2017 12:13am
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I am tired on technical , i used someone who had 70% trading lost , I give him small initial deposit, I told him to trading only micro lot i supervising what he/her doing, and i buy or sell his/her opposite position with bigger lot. Sure i lost my money on him but i gain revenue from my trading. Consider it cost of business Lol
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