Topic: Why technical analysis is not reliable - page 3. (Read 611 times)

I laughed seeing you make this thread, then what am I doing with technical analysis if it can't be relied on.
I've been studying technical and fundamental analysis for several years, but you said that it can't be relied on. It seems that you can't master it until you get frustrated and say that technical analysis is ridiculous and doesn't provide complete market details. Of course there are several combinations that are carried out because technical analysis will only predict the market based on existing data and seeing how the charts work.

Nobody can predict future that is why we get wrong predictions no matter how accurate we calculate for our trading. But for a day trader there is no other tool than rely on technical analysis and hope that this time their prediction will work and continue with that hope everytime.

If you feel you are not making profits then try changing your strategize and use different indicators but the fact is technical analysis is just a prediction not an assurance.

Technical analyses are not always perfect; they are assumptions made by trading experts based on experience and some tools they are using to make predictions, which are usually based on facts, and sometimes they are true but not reliable.

Aside from all these limitations, everyone that wanted to start trading should have learn so many things about trading which I believe after learning should be able to understand how risky crypto trading is. People with less knowledge and experience are always trying to blame technical analysis that we all know are not perfect and are not reliable because of how volatile market is.
Trading is risky, always avoid copying what others are doing if you don’t understand to avoid losing money easily.

The main situation that could mess up technical analysis is on the time that there would really be some sudden news or simply with those fundamentals on which it would really be something that would make tons of traders would really be liquidated specially to those who do make out some future positions on which we know that one red candle wick or green could really lead into those traders to burn out their capital or their positions.
This is why its not really not reliable but there are really moments or conditions on which could mess up technical analysis but we do know that not all the time this market would really be having those news.

It would really just that matter on a certain individual whether they would really be that focusing too much into those TA. Although this is much more better rather than
on making yourself having those random approach or positioning without any basis and this is something not that recommended once you hovered yourself into this market.
You would really be needing that educated approach on dealing up with volatile prices. It might not guaranteed but at least you are going in the right path.

the weakness of technical analysis is that when the market is under pressure, for example when an american official says that they will raise interest rates higher, this will affect the market directly and no matter how hard you do technical analysis it will not work. so as traders, we should not only rely on technical analysis, because at any time the market will change, we must also be able to see news and rumors on the market, so that will be able to help us determine more profitable positions and prevent serious losses.

My question to you is: is technical analysis not helpful to other traders? Now, if technical analysis is not reliable, shouldn't other traders stop using it? Is that right?

Let's just assume that technical analysis is not really reliable. What method should a trader use or do to get profit from trading on any exchange platform if we don't
do technical analysis anymore? Please answer OP so that we can be enlightened here on this forum platform.

Technical analysis is only as a complement part of various strategies because accuracy cannot be seen in a much greater percentage. Technical analysis is sometimes needed but not as a test of the overall process in trading because it is more to the statistical assumptions. A trader will use many indicators to start trading and usually they will use the most appropriate to decide when trading. Need the ability to undergo trading and not to mention talking about the control of the risk management.

That's why people consider trade too difficult for beginners because of the many considerations they need to decide. Even for a class of people who are experienced in trading also sometimes it will be difficult to determine the direction of trading when taking profit and stop loss because the market changes so fast.

Since nothing is 100% accurate, the only thing you can do if analysis doesn't work most of the time is try again later. We are all aware of the risks involved before we enter the trading world. Risk of perhaps losing your money. The market's movement can fluctuate because it occasionally reacts to news, which might alter the candles' entire structure and make predictions less successful. Traders also lose money as a result.

Furthermore, the analysis is meant to assist you stay on course and relieve you of the burden of making judgments because the market is never constant. People often struggle to decide what action to take, therefore one requirement for becoming a trader is being able to read the market and perform analysis. Only then can someone be referred to as a trader.

There are so many indicators, and some are easy to understand that almost every trader knows them and understands them. It is the more complicated indicators that are subject to different interpretations from different traders, and those are the ones to avoid. keeping things simple can be the best way to get results. With a good understanding of the simple indicators that every trader understands, chances of becoming profitable increases.

You may disagree that TA is useful in trading but have to think this - better trade having some basis and guide rather than doing like you are asking for luck and don't have any idea if this is a right or wrong call. It may be not useful on your end OP but do you think why the majority are using this tool? It only just means that traders consider this as a helping tool to decide when to sell and when to buy. Indeed, it was just an assumption because we never know what is coming but at least, with the use of Technical analysis, our decision is clear and at least have some assurance.

Dice, coins, the color of the first bird to fly by, the side on which you wake up...Since all these actions will at first be random but with time as more data build up for sure you could make TA out of this, I'm pretty sure that there will be people who will make 90% profitable trades in days when it rains!
After all, again, it's past events that you hope to be repeated in the same way!



Nope:


Fun fact, according to all possible charts, a negative value for oil was impossible to predict, because there wasn't any tool or method that would be able to take into account negative values, yet...it happened!  and the only ones that did predict it did it because of market conditions, not because of charts or indicators as there was none which would have been of use!

You cant be able to make yourself that be so sure of even if you are using up that fundamentals purely on which it would really be needing that in line with technicals so that at least you are having some idea on whats going on
or possible movements that could really happen. This is way much more better rather than putting up yourself on having some position without any basis and this is something which is not that recommended or ideal.
Its not reliable? How you do say so? Trying out to compare on making up some trades without any basis or analysis. You would really be able to make yourself that find its relevance.

So the question is, how you would really be that making yourself that making up some positioning towards the market without any basis. We do know that it cant really be
that just that too easy on handling yourself on a very speculative market on which it is really that something that do talks about total unpredictable and truly
giving out that random movement.

You cannot be 100% certain by doing technical analysis or any other analysis. Through technical analysis or any other analysis we can only predict that the next movement of the market may go in a certain direction but we are not sure that the market will go in the same direction. Many times it is seen that the market goes in the opposite direction of what we predict by analyzing the technical analysis and the market chart well. Sometimes there is so much bad news in the market that usually our analysis does not work properly. If a candle is four to five times larger than the normal way the candle fluctuates, then the prediction we made will not be correct because the market will suddenly move much higher. So, if you can analyze it correctly, it may match the market changes to some extent, but not completely match your analysis.

But for me, technical analysis is the nearest way to trade and support your analysis. It's not guaranteed yes, but a lot of professional traders use technical analysis for a living, cryptocurrency or not cryptocurrency technical analysis really exists.
Just think that trading will not give you a 100% guarantee.

One major problem with most technical trades is that they tend to rely on their predictions about the market other than supposed reactive , Also never forget that traders emotion plays a key role in determining trend, this is why you experience sometimes a sudden market change in direction, take you for instance, you might decide to buy a market but price reverse, this is where you as a trader suppose to react, so there are couple of reason why we have stop loses. Therefore, as a trader if you want to get the best out of market you must combine both technical analysis and the fundamental analysis, both makes what we call market analysis.

Still TA must not be underrated either, TA is the best tool we have available to predict what the markets may do, and while it is true that TA is based on the past actions of the markets, what else can we use to predict what the market may do other than its past? So while anything can happen, even things that we have never seen before and which could make any prediction useless, at the same time we do not really have any tool that can come close to predict what the market could do with the same accuracy of TA.

Well, your topic centered on technical analysis. Before now I have read some comparison between technical and fundamental analysis. Later I began to read about psychological analysis. All these tools do not make 100% sense independently, as they need each other in order to make a complete sense. Whoever is an expert on technical analysis should also know a bit of the fundamental analysis and vice versa. When there is a news in the society, you will understand that the chart will start tilting towards the news in the fundamentals. This is also applicable in the order way round. But then, the power of technical analysis should not be overemphasized. The knowledge of the charts and candlesticks is very important in cryptocurrency trading. No matter its limitations, its advantages overwhelms the limitations.

Really not that reliable but something that you could really be able to mainly make use with once you do hover yourself into this market on which it would really be just that a normal approach that you would really be having considering that this market is never been that predictable in the first place. You cant really just that make yourself that putting up some entries or exits without plotting these indicators into your chart. Yes, it doesnt really give out that precise prediction when it comes to trading. It would really be that still relevant no matter what. Try yourself on hovering into this space without using any TA's on which you would really be having that hard to know on to set up your entry points or even exits. Basing or depending about news or fundamentals isnt something that you could really be able to see on everyday on which it would really be that a normal
approach for you to make use the other way around.

You would be able to see its relevance once you do make yourself that get lost or doesnt know on what you could gonna do with the market on trying out to predict prices on where it could
potentially go.

Anyone saying the technical analysis is not reliable is not an informed trader because it is so reliable to me. Of course, I can't expect 100% success from it, and those traders who could possess a technical strategy with at least 75% winning should have the reliability with management, needless to say, some traders are still getting 95% or more from their technical analysis. So it is all about you, what you know and how you use what you know.

About your points, let's look at them one after the other;

1. You are so wrong about this. For it to use the past details to predict the future outcome doesn't mean it's bad, especially when you use the support and resistance strategies, including price action on the higher charts. That's its principle of operation, and the market is dynamic itself and it always respects the past records you are downgrading. And it respects it mainly because the market itself in the absence of new economic data/events, dances to the tune of the past records since it is not the market that trades itself, it is people who trade it. So, since people read the past record to predict the future and invest/trade due to that, the market often moves in that direction.

2. Yes, this point is valid. We have many traders all over the world and many would read the market differently. Above all, the main trend often prevails, so be a good trend trader. And if at all you would try a retracement/reversal, be a very good support and resistance trader. Also, to avoid any issues during the bad days use the right risk management.

3. I like you to know that all the burdens of trading should not rest on the shoulders of the technical analysis because it is merely a chart reading. How can't it know the economic happenings? But surely, it often adjusts itself on detecting them if you are a good chart reader. I see this often and change my stance if it has affected the initial market pattern. As the market is dynamic, the readers of the trading charts should be dynamic as well.

Anything that uses past/historical data as a basis or predictor for future outcomes is always unreliable. If you want to predict the price of a coin in the future with certainty, you'll also have to predict the dynamics (including crypto events) that will happen in the future, which is impossible. Therefore TA always comes with probability, and the longer the time frame, the higher the deviation.