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24213019 No.24213019 [Reply] [Original]

What is the logic behind technical analysis?
To me it's basically "charts went up and down so now I know it must go up"
what the fuck

>> No.24213042

>>24213019
every event have a chance percentage to happen

>> No.24213043

It's basically astrology for young males

>> No.24213058

>>24213019
https://en.wikipedia.org/wiki/Emergence

>> No.24213065

>>24213019
there is none
everyone is larping with that shit
especially that anbessa faggot

>> No.24213096

>>24213019
TA can potentially give you profitable entries and exits based on probabilities.

>> No.24213099

>>24213019
>>24213042
>>24213065
It's alright but you should just use it as an additional tool to aid in your research.

>> No.24213102

>market could go up or down at this point
>calling literally every pattern with a name
wtf

>> No.24213268

>>24213043
that want to be women

>> No.24213295
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24213295

>>24213019
You formulate a hypothesis through statistics really. IE, Corn futures-Euro drops 3%, 79% of every third Tuesday of the month. You then base your trading strategy around the hypothesis you found. It isn't as straight forward as just looking at lines and noise and looking for patterns. You have to understand why the pattern, the chances of what happens after the pattern concludes, and why it's going to move the way it does.

It's easy to spot a bull flag, but how many people are actually going through an entire chart history at a 15 minute time frame to see what the odds of a bullflag actually resulting in a price increase really are?

The reason TA doesn't work on crypto (for the most part) is simply that most crypto (shitcoins) don't have a long trading history that can be analyzed.

I'm not a trader at all, I just invest, but this is my understanding of what trading by technical analysis really involves.

>> No.24213303

a tool first invented so those with inside info could trade on it and then go back and say "look that wasnt inside info i saw this pattern on the chart that made me buy it!"

>> No.24213390

>>24213019

Its absolute snake oil. When you see someone using TA its an indication of serious mental illness. Best I've ever heard it described is astrology with graphs. Same kind of people who think they can tell your future by reading your palm or some shit.

>> No.24213582

>>24213019
im actually going to tell you the truth, count yourself lucky.

There are 2-3 useful concepts from TA.

The first is moving averages. They're an easy statistic to help measure the momentum of something, A similar version of this is the "volatility moving average" also called a bolinger band. When a band is breached, you see that the volatility is way up for some reason. Its a signal.

Then, the real TA magic comes from resistance and support. A support level is formed because there are many traders who bought a certain stock at that price, and their cognitive bias causes them to not want to sell it, unless it is at a profit. This "mental accounting" bias causes a support line to be formed. The key insight about TA is that it is actually capturing the cognitive shortcomings of traders --- because people are beasts with emotions and biases, when a large proportion of stockholders buys in at a certain price, that price level suddenly becomes special in the minds of traders. If people were perfectly rational traders that didnt hold on to losers and sell winners early, there wouldnt be support or resistance. But because people are biased, there is.

>> No.24213609

>>24213019
Why do zoomers love this face so much. The most uncreative generation

>> No.24213620

>>24213390
based

>> No.24213636

TA works sometimes but you don't really know when it will work and when it won't so it's essentially useless.

>> No.24213689

>>24213582
proper post

>> No.24213820

>>24213582
What about when RSI indicates that the echange is oversold or overbought?

>> No.24213847
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24213847

>>24213019
TA incorporates all available knowledge of the market, including inside knowledge. There is absolutely no such thing as fundamentals. Every market has reasons to be bullish and bearish. TA tells you which side has more confidence in their position. If you want to make money, you use TA. Every professional trader does.

>> No.24213883

>>24213019
Wall street made it up to trick peasants into parting with their money then retail scammers leveraged it to trick peasants into purchasing TA courses.

>> No.24213884

Buy the dip

>> No.24213893

>>24213019
From what I've been able to gather they are all just a bunch of degenerate gamblers, some of which has made some money and are now trying to capitalize on the fact by selling others their overpriced products.

>> No.24214041

>>24213019
Every institutional trader uses TA. For example my professor used to work as a treasury trader for a big bank where they constructed FX positions solely using TA. Didnt give a shit about fundamentals.

>> No.24214132

The vast majority of trading is done by bots. Bots use mathematics to trade.

Therefore, Fibonacci.

>> No.24214137
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24214137

The basic logic behind ta is that every single factor that affects price is priced in. So it trades in patterns that you can recognize. This does include insider information. Then, as new information comes out, it affects price.

>> No.24214198

>>24214132
Legal?

>> No.24214302

>>24214198
What?
Yes, using Fibonacci retracement is legal lol