Topic: What you don't know about Technical Analysis - page 2. (Read 461 times)

Well I can agree with this opinion, the value of this coin can actually be unrealistic and this is what the big traders offer us, but I as a simple trader with a small capital What can I do about that? Nothing of course? I can only walk with the market and buy and sell at the price that is determined in the market regardless of who determines the price in real !!

That is the reality in regards to TA. It is to believe that those passive traders don't rely upon TA's but having in the actual scenario and adapt to it will it exactly could help them. Traders should become vulnerable to that kind of change and we can't expect that TA's will work great all the time as we know how volatile we are.

Whales probably don't have that kind of analysis, instead, they go along with the market and use their manipulating power to change the trend. Besides, most traders are relying on their actions and predicting what they'll do next rather than to keep TA's.

Well, on my own. You can't rely only upon technical analysis, that is right, the market is extremely difficult to predict and creating speculation through TA is not commonly give an exact result ^{[ perhaps it is near ]}, how could you believe if this does not even give an accurate result. However, thank you for trying us to explain your technical analysis, --but, indeed, I believed if you will show your proof of this not only for discussion.

I trade using technical methods.

The reason for this is to make traders understand what we are up against so we can heed to every necessary trading rules which will keep us lasting in the trading game.

It is extremely difficult to predict the market through technical indicators and I will advise people to just focus on fundamental indicators on any assets their desire to trade. Trading is however a game and it is better you use what work for you.

Well, i don't believe you have to make accurate predictions to be profitable in trading.

Provided you have a good win rate on a series of trades, you are good to go.

No trading method is 100% accurate. I don't even think there is any that is 90%

I can understand what you are saying, but I will never be a fan of technical analysis. With graphs and lines you can prove anything. But you will have people who are pro TA and people who are against.
I haven't met anyone, who can make accurate analysis and predictions based on technical analysis.

If I ask "what moves price?", I am sure a lot of answers will be buyers and sellers; but what makes buyers and sellers buy or sell? The answer is Conviction.
All price movement results from an imbalance in the degree of conviction between the traders who believe the price is going up and those who believe the price is going down.

Retail traders are classified as passive traders and the only way we find ourselves in winning trades is by the actions of the big movers in the market who are willing to bid the market up or offer them lower.
This simply means that we are trading other people's perceptions of what is high and what is considered low. So in short, you are simply depending on the dynamic traders to make you a winner or a loser.
The big movers in the market are referred to as dynamic traders. The dynamic traders represent those with a large chunk of money enough to move the market.

Now let's get technical and relate this with the charts. Imagine an uptrend, for example, price surely gets to a level where it reverses; this level is marked as a level of resistance.
What really happened at that level of the market is that there wasn't one person in the whole world that was willing to bid the market higher; no one was convinced as to why price should go higher.
There are a whole number of traders out there with the psychological and financial resources to bid the market higher or lower and there is no way any technical methodology will know where the price is moving to except you get into the mind of the dynamic traders who are willing to move the market.

What technical analysis does is that it gets into the collective mind of the market but it can't get into the mind of the individual trader traders that drives the price up or down.
We as technical traders, always come up with a reason as to why the market went up or down (for example, trendlines, support or resistance, fibs etc.) but the truth is that there is no reason you will come up with as to why the market went up or down other than the fact that there is an imbalance (conviction).

No technical methodology is designed to tell you what will happen on a trade by trade basis. This is why we make mistakes because we are expecting something from our methodologies that don't exist!.
This is also the reason why a trading strategy/methodology wouldn't tell you what will happen on a trade-by-trade basis but on a series of trades by a percentage % basis.
Your consistency as a trader is based on what happens on a series of trades. This is also why it is not reasonable to expect a strategy with a mathematical method to work consistently in a changing market.

In conclusion, what technical analysis does is finding a pattern amidst the imbalance/conviction of the market, it measures the probability of one thing happening over another.
As a result of the fact that patterns (edges) show up from this imbalance, it turns technical analysis into an unending stream of opportunities to enrich oneself.
The effect of the dynamic traders in the market doesn't mean you can't make consistent income with technical methodology; all you need is to trade with an edge/strategy that works and follow a trading plan.


Understanding the dynamics of price movement will help you trade your plan without expectations or putting emphasis on things that doesn't matter.
I hope you see the market differently now.