Why does technical analysis work?

[Anonymous No.56028442]

[Anonymous No.56028446]

[Anonymous No.56028450]

>>56028442
It doesn't, it's a meme

[Anonymous No.56028471]

It "works" because most people use it.

[Anonymous No.56028489]

it doesn't

when you have 10000 monkeys flipping coins you will get by random chance a few that go on hot streaks

[Anonymous No.56028496]

idiots and algos are trained on mens astrology so it becomes a self fulfilling prophecy

[Anonymous No.56028556]

Because people follow patterns. Even if you have random scenarios and random conditions you already know a persons reaction to those things is gonna be the same as it was 200 years ago.

[Anonymous No.56028577]

1. Much of technical analysis is an simply mathematics (you should have learned to draw a “trend line” in elementary school)

2. Algorithms and bots and programmed to abide by certain technical analysis parameters

3. Self fulfilling prophecy. If the alternative is complete randomness, even a slight advantage from the self fulfilling prophecy improves your chance of being correct

[Anonymous No.56028625]

Momentum as a risk premium in finance has been extensively documented in the academic literature, with evidence of persistent abnormal returns demonstrated across a range of asset classes, prediction horizons and time periods

> B. Hurst, Y. H. Ooi, and L. H. Pedersen, “A century of evidence on trend-following investing,” The Journal of Portfolio Management, vol. 44, no. 1, pp. 15–29, 2017.

> Y. Lemprire, C. Deremble, P. Seager, M. Potters, and J.-P. Bouchaud, “Two centuries of trend following,” Journal of Investment Strategies, vol. 3, no. 3, pp. 41–61, 2014.

[Anonymous No.56028683]

>>56028625
momentum is not technical analysis

[Anonymous No.56028717]

>>56028442
You are charting human emotion. You can predict how crowds will react.

[Anonymous No.56028720]

>>56028683

MACD divided by ATR can detect momentum. There are academic papers about this too.

Both are technical analysis indicators.

In fact anything in technical analysis if you volatility normalize it using ATR or StdDev and using a position sizing function which avoids high volatility and high MACD divided by high ATR or something like that will work.

Not as well as say cointegration tests, kalman filters, vine copula, sharpe ratio as a loss function for a neural network etc.

But it will work nonetheless.

You won't get any alpha. You will surely get beta.

The missing piece in technical analysis is normalized volatility and position sizing.

[Anonymous No.56028796]

>>56028450
>>56028489
Cope low-IQers. Back 2 plebbit with you.

[Anonymous No.56028995]

>>56028442
That shit never worked for me for once. A single fud reverses the whole TA and renders all expert stupid. Following the news to buy on ACH and CYMI fetched me more gains than any TA in since inception.

[Anonymous No.56029005]

>>56028796
holy cringe

[Anonymous No.56029028]

>>56028442
I think it does work to a very short extent with very unreliable results. Some of it is a self fulfilling prophecy, and most of it is confirmation bias.

Just don't get involved with it, seriously. Learn from my mistakes. Take heroine instead if you're completely unwilling to learn a real skill. Don't get addicted to this shit.

I don't look at it anymore

[Anonymous No.56029076]

>>56028720
Any place to read/learn more on this?

[Anonymous No.56029112]

>>56029076

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2695101

See Section 3.2.2. That is MACD / ATR. The position sizing method is also presented.

[Anonymous No.56029126]

Nice bait thread. It doesn’t you fucking faggot, now kys.

[Anonymous No.56029236]

Bots have to be programmed to trade somehow, so it would work within those confines. However, TA doesn't work to predict the scamwicks CZ and the like love to pull off.

[Anonymous No.56030850]

>>56029126
math

[Anonymous No.56031153]

It works until it doesn't, so never enter a trade with everything you have lol

[Anonymous No.56031211]

>>56029005
COPE

[Anonymous No.56031448]

>>56031153
Only jeets chase yields with everything. Now keeping more funds on CryptMi for my well-being than I'm using for trading..

[Anonymous No.56031474]

>>56028442
it doesn't work as in a way to predict the future

it is useful tho to manage your risk/reward ratio

[Anonymous No.56031482]

>>56028720
This is not what most people mean by "technical analysis", but it should be. All this shit you talk about I learned from algorithmic trading books and not any self-styled as "technical analysis". Those books had no math and that's how I knew they were a complete joke.

[Anonymous No.56031486]

>>56028442
Self-fulfilling prophecy