Technical Analysis - Effective Tool or Mumbo Jumbo Nonsense?
One topic that's always the subject of fierce debate is technical analysis.
Some believe it to be an effective tool for determining probabilistic outcomes based on historical occurences. Others consider it to be nothing more than hocus pocus, mumbo jumbo nonsense.
What's the truth? That's what I'll be discussing in this video.
DISCLAIMER: This is NOT financial advice. I am just offering my opinions. I am not responsible for any investment decisions that you choose to make.
I love your accent! :D I suppose it's a common trend to say that, but I really do <3.
This is the only bit that strikes me as odd in the arguments you mentioned. These patterns tend to repeat themselves, but seeing as we are heading into an unexplored market with contrasting views, I would also assume that the traditional way of seeing the market may change to adapt to the new rules. This would of course mean that new paradigms would arise that would require a ton of analysis and waiting up to see the changes in human behaviour.
Never get tired of hearing compliments. Thank you Sharon!
Amazing Idea of the post
Such a great video! Upvoted :)
Hey @louisthomas! Thanks for another interesting video! I am rather skeptical of TA, but Tone Vays has an interesting approach and also Datadash who mostly uses Simple tools like SMA often makes good calls. So there seems to be something to it, I just haven't had the time to have a closer look. The sentence you read/quoted, that all information is reflected by the price is very interesting. One thing that came to mind is that although countless factors always resemble the same result, can you really deviate or backtrack all information from it and predict its movement? Is one attribute(price/price action) really enough to predict the next move? Since it concentrates so much information into one attribute, the impression I get is the one from a hash function. One that always delivers the same result, but can never be backtracked to its original input. But that's just the train of thought of a traders-laymen, which is why I reside on the technological side of things. 😅
Thanks again for this interesting video!
Cheers - @sblue
Technical analysis is 50% good stuff, 25% mumbojumbo and 25% gambling lol
Good one from @louisthomas, technical analysis is mostly work for an investor to determined market trend, I used fundamentals analysis which I found more reliable, thanks for this interesting topic.
Technical analysis (TA) provides a systematic means of analysing the market and most successful traders have utilised some form of trend following strategy. Using TA will not guarantee a trader a positive outcome but instead sets out to stack the odds in your favour when making a trade. It should be remembered that most TA indicators are lagging which means that their utility can be questioned. I think TA is a useful tool to determine trend direction and support and resistance levels but it is not a "magic bullet" particularly in a a volatile market like crypto.
The technical analysis is valid because many people are guided by it, there is a kind of consensus, we can appreciate it in the movements of the coins in Fibonacci levels. But in the case of cryptocurrencies it seems that the fundamental analysis is more important than the technical analysis.
90% just a bunch of self fufilling prophecy that occasionally nails it on the head. For the most part, if you took away the TA tool you would really see the lunacy of day traders.
i was skeptical about TA as well. but after continuing to do my research i was able to see the benefits and use of good TA. now im just trying to study up and learn more. it can only help having more knowledge... right???
Both. Technical analysis is a self-fulfilling prophecy.
Once day someone invented all these lines and charts and hey look at that peak, it lines up with this one...that means something. Soon everyone followed all these stochastics and MAs and everything else.
It is significant, BECAUSE people follow it and look at it the same way. People literally buy when something is about to hit a 200 MA, or 50 MA...and the candle bounces...amazing...it worked!
I don't think there is much more to it than that, but everyone has their own system and you should do what works best for you. Good luck to all.