Is Technical Analysis self-fulfilling or self-defeating?

[sj8070]

You hear both opinions from academics.

I would probably argue self-fulfilling, especially when it comes to resistance levels and MA crossings.

V keen to hear from the experienced members of this forum.

 

[Mr. Charts]

Is there a purpose in life?

 

[sj8070]

Is there a purpose in life?

Clearly. To become filthy rich.

 

[bbmac]

You hear both opinions from academics.

I would probably argue self-fulfilling, especially when it comes to resistance levels and MA crossings.

V keen to hear from the experienced members of this forum.

I think that it tends toward being self-fulfilling, the extent to which is unproven and there is probably no emprirical evidence to support this assertion anyway ? That said, and it is probably irelevant anyway, properly done, it can tell us something about price that price alone cannot always tell us, and to this extent is useful in helping us develop a technical trading edge.

G/L

 

[Mr. Charts]

If that's why you're asking this question and reading this forum, you're wasting your time.
Do a search and you'll find there are already as many posts on the subject as there are leaves in a forest.

 

[sj8070]

It is arguably the most relevant thing on this entire forum. Does the forum's existence help or hinder its members? (assuming we only use technicals)

 

[sj8070]

If that's why you're asking this question and reading this forum, you're wasting your time.
Do a search and you'll find there are already as many posts on the subject as there are leaves in a forest.

It was an attempt at Irony. And I'd rather discuss than read.

 

[Shakone]

It is probably both...for some people.

 

[DionysusToast]

What makes you think it is either?

What you really need to do is to find someone that is profitable with support and resistance and then give them a rigged system with support and resistance at randomly assigned levels. The trader would think he is using support and resistance when in fact he is not.

Would he succeed or fail? I rather think he's succeed - but this test will probably never happen.

I put it to you that TA is a lucky rabbits foot.

 

[sj8070]

it has to be one. if enough people heed it, do they trade the "profits"away, or do they accentuate the effects. I am inclined to believe the latter.

DT, do you use no TA at all? a true Taleb disciple then?

 

[ThinkForexJB]

LOL - this has the potential to become an extremely philosophical thread. Which came first, the chicken or the egg?

 

[DionysusToast]

It does not have to be one or the other.

Let's say someone traded based on the pattern made by the leaves in their tea.

They have the tea before trading and based on the leaves left, they draw horizontal lines above and below the current price. They go long at the lines below and short at the ones above.

When they first start, this system is not good. Over time, they persevere. They get a feel for that market, they get a feel for how much leeway an entry needs to give it chance to come good. They get a feel for how to manage the trade after entry. They get a feel for when to take a trade and when not to take a trade.

Eventually, they are profitable. They are consistenly making money on this combination of tea leaves and levels.

Now - what happens when this person attempts to trade without the tea leaves and why ?

 

[DionysusToast]

Which came first, the chicken or the egg?

Daddy chicken came first.

This is why mommy chicken is in such a fowl mood.

 

[sj8070]

no my point is more ad extrema.

if every market participant in the whole world believed that the Pivot Point theory was 100% definite and accurate, then the market would jump discretely between these levels. thus the more a theory is propagated the more likely it is to be realised.

Therefore, in my humble opinion, if technical analysis is to have any value, one should choose the most popular indicators only

 

[Shakone]

If everyone believes the same thing, then you can't get filled. Since getting filled is necessary at some point if you want to make money, you will have to find a different way to enter from all the others. And you won't be the only one who needs to.

 

[ThinkForexJB]

If everyone believes the same thing, then you can't get filled. Since getting filled is necessary at some point if you want to make money, you will have to find a different way to enter from all the others. And you won't be the only one who needs to.

So true...it is like everyone playing poker with the exact same strategy. If there is no variance and everyone is doing the same thing, the house is the only one that wins.