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There is no such thing as technical analysis

  • #41
  • Mar 7, 2017 9:37am Mar 7, 2017 9:37am
Quoting Nabz
I was a firm believer in technical analysis (TA), and based my trades solely on it. But slowly, I've come to see the light that there isn't any such thing. First time I doubted technical analytics was when I saw a video where a guy was doing technical analysis on a picture of mountains. Yup, he was drawing support, resistance and trend lines on mountains. So, today I was looking at a chart and thought why not draw the lines and see if it connects. Its just a chart of daily watch time in minutes for my Youtube videos. There are no sellers, no buyers,...
you will see what THEY SEE.

i think the whole idea of tech analysis is to draw out a scenario for a typical retail trader. you want to get insight into what they're seeing at that moment, and when you see that wrong move...you pounce!
  • #42
  • Mar 7, 2017 9:41am Mar 7, 2017 9:41am
Quoting cat
You have been a member for no longer than one month, and yet you are throwing out childish challenges.
old boys club is it!! do i need to graduate from trader to complainer to join then
  • #43
  • Mar 7, 2017 9:54am Mar 7, 2017 9:54am
Quoting EcoTrader
{quote} old boys club is it!! do i need to graduate from trader to complainer to join then
Not at all, you just need to know what you're talking about. You looked at my chart above, with technical parameters such as moving averages, pivot levels etc, and posted a load of gibberish pointing out your own technical levels, which would have been fine had you not confidently asserted that the 30m 100sma was not the reason for the resistance, and then, on another thread on ff, titled ' What helped you the most to be profitable ', you answer on page 15, " dropping technicals and focusing on fundamentals ". So you are a mass of contradiction, telling me, a purely technical trader with ten years trading under my belt, that my technical analysis is wrong when you haven't got the first clue how to use TA yourself!!

Away with you...I've wasted enough of my time.
  • #44
  • Mar 7, 2017 9:55am Mar 7, 2017 9:55am
No matter how you trade, you either profit or not. Thats it, thats all that matters. The ones who care about how other profit are the ones who cant profit....
  • #45
  • Mar 7, 2017 9:55am Mar 7, 2017 9:55am
Quoting aaven
{quote} Tunera, Could you please tell me what were the reasons/experiences that lead to abandoning Fundamental Analysis. And how has been your Trading Success after keeping the FA aside (It is clear as Day Light that you are a successful trader but I am curious between before and after FA within your existing success). Do you still take trades irrespective whether news events, major speeches are lined up? Thanks
The reason is that every fundamental event, move price.. right?
These movements are recorded in charts.

Therefore, when you are looking at charts, you are looking also at fundamentals (of the past).

Now, it is true that fundamental situations influence the charts (of course), but it is also true that charts (the past and current situation of a market) influence fundamentals.

For example, a weak currency would mean high inflation, low interest rates, and high exports, just by looking the charts you can know it.
When a weak currency chart signal the beginning of a new uptrend (thanks to technical analysis if you want), that mean inflation is going to go down in the near future, or interest rates are going to go up, etc.
Then, when it will go up enough, exports will start going down, unemplyment will start going up, etc.

Charts (technical analysis) will show weakness in the uptrend, signaling the beginning of a next down trend soon.
Like magic, future fundamental data will be bad and this will "justify" the beginning of a new downtrend, etc. etc.

Fundamental and Technical (charts) are the same thing, once you master one, the other is mastered too.

That's why i've nothing against fundamental traders, a good fundamental trader can be very profitable without even looking charts.
Same way, a good technical trader can be profitable not even caring about fundamentals.

When a trader is good at both fundamental and technicals, there you have a solid investor.

When i say i don't care about fundamentals i mean i don't care if a fundamental news is coming, most of the time i already know if it will be good or bad, just by looking at charts.

It is however a good idea to stay informed regarding the overall fundamental situation of a currency, information is always power.
  • #46
  • Mar 7, 2017 10:00am Mar 7, 2017 10:00am
@EcoTrader/Nabz

Here's some before-the-fact analysis based solely on my own version of technicals, which is price-action basically.
Over the next one hour I'm going to be looking for a buy setup on the M1 TF. If I don't find a signal I won't trade.

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  • #47
  • Mar 7, 2017 10:07am Mar 7, 2017 10:07am
Quoting tunera
{quote} i have abandoned fundamental analysis maaaany years ago, don't care a bit about news, inflation, situation, interest rates, nfp, this, that. everything you need is in the charts. now some other people (like in this thread), say the opposite, they say that chart is fake and fundamental trading is the only way to go. my thinking is that if we can combine a successful fundamental trader and a successful technical trader, we could have a super successful trading team!
Agree. I believe big news could support the long term trend, but I don't care about short term news just like you. Most fundamental analysis we could get are from big banks who really earn from our loss, so that's the point.
  • #48
  • Mar 7, 2017 10:15am Mar 7, 2017 10:15am
Quoting cat
{quote} Not at all, you just need to know what you're talking about. You looked at my chart above, with technical parameters such as moving averages, pivot levels etc, and posted a load of gibberish pointing out your own technical levels, which would have been fine had you not confidently asserted that the 30m 100sma was not the reason for the resistance, and then, on another thread on ff, titled ' What helped you the most to be profitable ', you answer on page 15, " dropping technicals and focusing on fundamentals ". So you are a mass of contradiction,...

You must be an expert in talking out your a....s Now you state i am contradicting myself, really? since you felt the need to go over my replies on other threads just to find evidence to fit your beliefs, you'd also have noticed that i mentioned that TA does work just not for everyone! perhaps you missed that one. furthermore i have never stated that technical analysis is wrong. I have however said if it doesn't work for people they should have a go at the fundamentals. that's me being honest, can't say the same about you though - waiting for the next statement - maybe it will be that i am claiming to be GOD this time.


oh by the way, i know quite a few people struggling to make heads or tails from trading 10+ years down the road with no real success. So claiming to be a trader with 10 years behind your belt is meaningless. The offer is still on if you want to take it to show me that i am wrong about you and TA in general (just so you don't misinterpret this, by general i am referring to 90 to 95% of people that fail - not everyone)
  • #49
  • Mar 7, 2017 10:19am Mar 7, 2017 10:19am
Quoting simond2002
@EcoTrader/Nabz Here's some before-the-fact analysis based solely on my own version of technicals, which is price-action basically. Over the next one hour I'm going to be looking for a buy setup on the M1 TF. If I don't find a signal I won't trade. {image}
If only some others can take a leaf out your book. Kudos to you for having a go at this (i don't know anything about you and give you open floor to help me see)
  • #50
  • Mar 7, 2017 10:24am Mar 7, 2017 10:24am
I have a nice little example of technical analysis vs fundamental analysis taken from March 1st. The first is a post by me citing a strong technical resistance level on my Daily chart, and the reply cites the fundamental reason why the market is as bullish as it looks, and is likely to stay that way, in other words, don't short if you know what's good for you. If anyone is interested in knowing what thread this is from, then drop me a pm and I'll tell you.

me - " I have 12,100 as a strong top possibility for Dax on today's run, may not get there, but if it does, I have resistance. Tomorrow could be a down day from this level "

reply -
" I would definitely not Short this one now. When you see big gains like this you know the ECB,FED and BOJ are behind these gains. Good gain days are usually followed by more gains. This week will most likely be a week they wish to squeeze the weekly bears. I can see them trying to squeeze everyone out which decided to short first quarter futures which expire the third week of March. From the looks of things first quarter will be strong with good gains "

Anyone who trades the Dax will know exactly who was right.
  • #51
  • Edited 11:11am Mar 7, 2017 10:40am | Edited 11:11am
Quoting EcoTrader
{quote} The offer is still on if you want to take it to show me that i am wrong about you and TA in general (just so you don't
misinterpret this, )
With risk of repeating myself, I don't give a monkey's what you think of me, it is the very last thing on my mind, and certainly not enough to bow to your wishes and inconvenience myself by posting my trades, purely for your benefit. That would be as meaningless to me as my being a trader with ten year's experience is to you. Adios my friend, and I sincerely wish you the very best with your trading, despite today's lively little intercourse. We are all in this together at the end of the day, and there is not a single trader on ff whom I would not want to succeed, despite my banter.

What I will say in addition however, and purely for your own future reference, is try not to be so patronizing when you post. Your first post to me on this thread, after I had posted my chart, had four paragraphs to it. Each paragraph began like this :

"Actually, pivot points are nothing more than a wrapper....

" I should also point out that the 100 sma resistance isn't the reason the price turned....

" So to summarize all the technical analysis you have put forth as releevant....

" Sorry to pick you out like this but....

That lot reminded me of a boy at school, who by the way no one liked, who reckoned he knew it all, all the time, which was usually very far from the truth.

Use a little bit of modesty, and you'll do okay on this forum.
  • #52
  • Mar 7, 2017 11:13am Mar 7, 2017 11:13am
Quoting simond2002
Over the next one hour I'm going to be looking for a buy setup on the M1 TF. If I don't find a signal I won't trade.
Had a few buys on this, first two were tapped out at b/e, third is running at b/e with stop where it should be. It's in the lap of the gods from herein.

I'm out of here now. But I want to say that it's important when defining TA to make sure we're fully cogniscent of exactly what TA means. The fact that price drives everything makes distinguishing indicator based TA from basic price-action based TA difficult. But there absolutely is a distinction in my view - and remaining focused on just where the buyers and sellers are, and aiming to trade in harmony with them makes all the difference to one's own trading - and more importantly one's own sanity

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  • #53
  • Mar 7, 2017 11:14am Mar 7, 2017 11:14am
Quoting tunera
{quote} The reason is that every fundamental event, move price.. right? These movements are recorded in charts. Therefore, when you are looking at charts, you are looking also at fundamentals (of the past). Now, it is true that fundamental situations influence the charts (of course), but it is also true that charts (the past and current situation of a market) influence fundamentals. For example, a weak currency would mean high inflation, low interest rates, and high exports, just by looking the charts you can know it. When a weak currency chart...
I thought about this a long time before taking the plunge into fundamentals and initially i believed it to be as you say but in reality i have found it to be more of a grey area. There are 2 ways to trade fundamentally, the first is on expectation of economic shifts ,central bank or government policy. In charts you will begin to see price move but you have critical pieces of information missing to really take advantage of the situation. The first is why is price moving and the second is where is it going. All you see in the chart is price starting to move but you wont know if it's going to be a big move or a small move or how long you need to stay with it. Without these elements you just see price structure at the here and now. So while you might grab a trade or two you really have no information to go off besides what you see in the chart.
So for example if the expectation is a rate hike then guaranteed all those immediate resistance levels you see historically will be broken. Again you don't know this and if you are in this early (unlikely a regular occurrence, more luck - hence don't pick tops and bottoms general rules) so you probably take profit. Nothing wrong with doing it this way but you are getting out prematurely - that is if trend trading is part of your process of course. A fundamental trader will be long from the start and will ride out a greater proportion of profit than a TA trader would. In general terms, you define a trend in TA as a series of higher highs and lows with a bunch of ways to do it including moving averages. The problem is you need to establish a trend is in play before you commit so you end up missing opportunity. A day trader that doesn't trend trade can get into the trade relatively early but will most likely be out at technical levels. A day trader would need to enter a trade on every leg of the move spanning multiple trading sessions to get closer to the profit that the trend trader gets - minus transaction costs.

The other way to trade news is when data comes out that isn't priced or is sentiment related. In the former, a TA trader has no hope outside of pure guesswork because there is no price structure to accompany the move its instant and has no relevance to price structure giving traders no time to assess the technical landscape. These sorts of releases come weekly but are not as common as data being released more or less inline with expectations.

So to sum this up i just find it a very grey area weighted on the TA side of being the fly trap. While some traders can get around this profitably, not many do in reality and news presents greater risk to the chart trader than any price structure can. Charts cannot define future expectation and definitely cannot define the importance or effect a news release has that is not priced in.

Cat if you are reading this i have highlighted the bits to make it crystal to you so that you don't conjure up more nonsense
  • #54
  • Mar 7, 2017 11:24am Mar 7, 2017 11:24am
Quoting simond2002
{quote} Had a few buys on this, first two were tapped out at b/e, third is running at b/e with stop where it should be. It's in the lap of the gods from herein. I'm out of here now. But I want to say that it's important when defining TA to make sure we're fully cogniscent of exactly what TA means. The fact that price drives everything makes distinguishing indicator based TA from basic price-action based TA difficult. But there absolutely is a distinction in my view - and remaining focused on just where the buyers and sellers are, and aiming to trade...
Therein lies the problem for me with TA. Losses are inevitable and you have 2 Break evens although that isn't always the case and those costs add up. I think this is where the people that can make money from trading TA shine and the rest don't and that is rock solid money management. You need to generate enough winners to cover the losses and grow the account. I am a human that makes mistakes like many out there (cat never makes mistakes) and could never define a process where the costs were eaten up by profits. I am nowhere near this bad now and count myself lucky for being on a path that i can at least profit with mistakes accounted without breaking the account. Thanks for sharing
  • #55
  • Mar 7, 2017 11:26am Mar 7, 2017 11:26am
I use market structure analysis in my trading, which is a combination of FA and TA (which the OP still knows nothing about). I believe FA sets trends (or lack of trends), and follow FA's as they unfold over time. Long term trades are generally based on FA. I use TA to fine tuning trading to a day to day decision making process, on short term trades. There is no need to pick TA or FA, since large position traders use both. So, if you are using only one, better understand how large position traders use the approach you use, and understand that you are at a disadvantage from the start because you discount the other approach that you ignore. Good trading.
  • #56
  • Edited 12:14pm Mar 7, 2017 12:03pm | Edited 12:14pm
I think the most important thing for people to take away from this thread, because threads like this peter out pretty quickly, is that we are all very different traders - we use different strategies on different time frames. Some of us win, some of us lose, and this all boils down not to how long we have been trading, but whether we have figured out a way of profiting consistently from price movement. I'm sure there are people who can do this relatively quickly, though for most it takes a number of years if they get there at all.

The question of fundamentalism vs TA really boils down to the length of time we are holding trades. So for an intra-day trader such as myself who can be in and out of trades ten times or more a day, then fundamental analysis plays no role whatsoever - no news feeds, no checking to see what's happening elsewhere, but purely 100% chart based trading, buying or selling set ups on patterns I recognize as an opportunity to make money.

For a trader holding a trade for weeks or months, then sure, fundamental analysis is going to be far more relevant to this type of trader.

I think it is very important to separate the differences, because many people coming into the markets for the first time, and there are very many here on ff, simply haven't got a clue how best to approach the markets, and I know this because I was the same, and it took me a long time to find out that for me, trading the volatility during the day off of small time frames, taking profits at specific levels, was the best way to go. The time element is important as well, because many people trade in their spare time, as I did to begin with, and simply cannot sit at their computer waiting for something to happen. If you are one of these, then in my opinion the best way to advance is to study TA, find out exactly what makes the price move between the levels that it does on the time frame that best suits you, and go from there. This way I was able to study and then to trade the moves longer term traders regard as noise. By concentrating on time frames down as small as 10 seconds for my entries, I would always be trading, even on the choppiest days when those on higher time frames are unable to see any structure in the market at all, and by always trading, within my means obviously, I was able to acquire a great deal of knowledge simply by way of trial and error.

My advice then to people new to trading, is not to sit twiddling your thumbs watching price movement on a 30 min chart, but get in there on a much smaller time frame, 1 minute or even smaller. You'll find it difficult to begin with, but the experience and knowledge you will acquire from it will be invaluable to you as you progress as a trader.
  • #57
  • Mar 7, 2017 12:32pm Mar 7, 2017 12:32pm
Quoting EcoTrader
{quote} I thought about this a long time before taking the plunge into fundamentals and initially i believed it to be as you say but in reality i have found it to be more of a grey area. There are 2 ways to trade fundamentally, the first is on expectation of economic shifts ,central bank or government policy. In charts you will begin to see price move but you have critical pieces of information missing to really take advantage of the situation. The first is why is price moving and the second is where is it going. All you see in the chart is price...
You know, the problem with technical analysis is that it is not an easy task to technically analyze a chart, only 1 trader out of 1000 is able to produce decent and valuable technical analysis.

The others play around with trendlines and "levels" and indicators and strange supply and demand popular theories in a voodoo way that don't have any real confirmation.

To sum up, you are right, popular technical analysis is mostly crap.
  • #58
  • Mar 7, 2017 12:38pm Mar 7, 2017 12:38pm
martin schwartz would curse the hell of you anti tech analysis people...
  • #59
  • Mar 7, 2017 12:49pm Mar 7, 2017 12:49pm
  •  hak444
  • | Joined Aug 2016 | Status: knowing is not enough,we must apply | 41 Posts
I think almost all threads here go down this path...
and i am still amazed that traders who have been here for years still argue like a kid. i mean you guys should know better how things go down this way. Starting from lame arguments ending in personal attacks.... LOL
Don't you guys think that this (sometimes volatile) behavior will affect your mindset and trading??? My opinion IT DOES

Now something about this topic/thread. The title is "There is no such thing as technical analysis", i don't think the OP is asking for someone's opinion here. If that was the case he should have never made such statement and since he has already a set belief that TA is useless then why try to convince him. If something else works for him why not ask about that if your really interested otherwise just move along. As i said in another thread, people should not force their opinion on others, like saying this system which i use gives me great result. Does that mean its the only way some one can make money?....
absolutely not.
If he (or some else) is using fundamental analysis (which the way i trade is useless....just my opinion) then that's great. As long as your making money consistently with your technique, your doing great.
There is one thread called "planetary cycle" (or something like that ). They trade based on movement of planets and their positions(if am not wrong)....if that works for them why should i get so worked up?

Why not concentrate on your own method and if its not working up to your expectations then work on it , tweak it or use something else that you understand and gives you favorable results...

If only we truly believe and follow this saying....
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I can accept failure but i can't accept not trying. (Michael Jordan)
  • #60
  • Mar 7, 2017 12:51pm Mar 7, 2017 12:51pm
Quoting Crackpot
Ofcourse there is! Works for me: {image}
Hilarious.
That's mighty creative
Live life king size !
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