Is TA a self-fulfilling prophecy? - page 2.

harizen

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Quote from: Cnut237 on April 23, 2019, 09:18:05 AM

I've long been of the opinion that technical analysis shouldn't really work with crypto markets, which are generally very thin - and for smaller coins quite easily manipulated.
However a lot of people do have faith in TA, and use it to influence their trading decisions. Since it is common knowledge that some people use TA, does this then become self-fulfilling, and so lead to increased market manipulation because if for example TA says a rise is coming, bears can wait for the inevitable fomo from TA traders and then dump en masse to short the coin and force prices back lower again... and then wait for the next TA 'signal' and repeat.
What does everyone else think? Is TA in crypto self-fulfilling in this way, and does that in turn lead some traders to exploit it in a sort of meta-TA? Or is everything I've said complete nonsense?

Technical analysis are designed to give references for the next strategy. Yes, a set of possible outcome which may lead to success.

Since they are "references", obviously no way people should solely rely on that. No one knows what will happen next. We all know that market behaviour in crypto is way different in stocks. Just imagined that most TA's are being spoiled in stocks so what's more in crypto?

I have seen lots of crypto traders who are really good in chart reading but ended up always being busted. That's because their TA's doesn't include the outside factors and just rely on indicators. Again, TA's are good references as we can speculate the possible outcome, but here in cryptos, we need to add other variants on our set of TA's in order to increase our winning chances.

dothebeats

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Cashback 15%

TA is somewhat useless in highly volatile markets like bitcoin whereas in Forex and stocks, TA is an amazing tool, yet even then one shouldn't rely fully on such analysis. Anyway, I think TA has its own merits given that most traders are using it for their positions in the market, creating a hive-mind that makes normal market movements seem like a pattern that is followed by most people resulting into some predictions being correct. Since someone have started keeping 'patterns' of the market, anyone who reads it will take note of it and when that pattern appears, they'll know what to do and how to react. But yeah, it could work on relatively stable markets but not in cryptocurrencies at all time, given that the said market is young and a lot of people are doing different things at a given time.

carter34

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Quote from: Cnut237 on April 23, 2019, 09:18:05 AM

Or is everything I've said complete nonsense?

Nope, you ain't saying nonsense. You have said what I think many TA traders would say. Plus I like the title, you would have gained a merit from me Shocked

In fact, when TA fulfills certain market order, I become astonished. If you are a follower of TA, all that is needed is patience and the prophecy will come around... Cheers!

milewilda

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Activity: 3094

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Possible to happen but not at all! Why? because not all traders are depending on TA's. There might be some but not generally a thing where market manipulators would consider to use it on making their move.

TA's isnt a reliable thing for us to depend on making order positions and im pretty sure that most traders do aware that this unpredictable market do corresponds with fundamentals too and not only with TA's.

hugeblack

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Activity: 2702

Merit: 4002

Technical analysis may lead to logical results if it takes these factors into account:

- mempool: tx/day.
- Analysis of the behavior of current and future news.

Otherwise, the technical analysis is a prediction that may or may not be true but will not change the price.
The reason for this is that many will lose trust in these analyzes as soon as they start to lose & thus reduces its impacts.

mk4

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The thing is, people mostly misunderstand what TA actually is. Some people think TA is actually accurately predicting what's going to happen with the prices, but the truth is, TA is just being used to look at the odds, and using the odds to your favor by correctly assessing the risks:reward ratio.

But to answer your question: it can be. Especially when were talking about multiple big name YouTubers saying that it's likely for the prices to increase, then this would cause their respective watchers/subscribers to FOMO in.

Cnut237

legendary

Activity: 1904

Merit: 1277

I've long been of the opinion that technical analysis shouldn't really work with crypto markets, which are generally very thin - and for smaller coins quite easily manipulated.
However a lot of people do have faith in TA, and use it to influence their trading decisions. Since it is common knowledge that some people use TA, does this then become self-fulfilling, and so lead to increased market manipulation because if for example TA says a rise is coming, bears can wait for the inevitable fomo from TA traders and then dump en masse to short the coin and force prices back lower again... and then wait for the next TA 'signal' and repeat.
What does everyone else think? Is TA in crypto self-fulfilling in this way, and does that in turn lead some traders to exploit it in a sort of meta-TA? Or is everything I've said complete nonsense?

Topic: Is TA a self-fulfilling prophecy? - page 2. (Read 273 times)