Topic: Why technical analysis is not reliable - page 4. (Read 1070 times)

Actually yes exactly as you said that however in the world of trading there is absolutely no strategy that can achieve 100% accuracy, it is impossible because after all this is a trade which always involves risk, simply put if for example there is a profit opportunity then there will always be a possibility of loss, it's always like that but maybe the difference is when you are really able to manage, control and run everything properly without doing something that is not recommended especially if for example you have experience and high enough flying hours then you will be able to make the chances of profit greater than the possibility of loss.

Technical or fundamental analysis is also the same in the end will never be able to provide 100% accuracy to really give a profit, the logic is that if for example it can make traders always end the session with a profit then obviously there must be a lot of successful traders, but the reality is not like that. As you explained above about TA and it is true that TA can only be relied on to find out the situation and market conditions that are happening, and usually I use TA only to determine whether the trend will be strong up or strong down or sideways so that when there is already knowing the situation then that's where I will make open positions, but still for the problem of possible losses can still occur.

TA gives interest areas based on past data and order flow to execute based on real-time data. You just need to understand when Shorts go aggro on support and get trapped, take long and enjoy them getting squeezed. Vice versa for shorting.

You forget that trading is all about predicting the future. History always repeats itself and this is true on trading. Those patterns and indicators is just keep repeating that’s many people use it as basis for trades because it’s proven working in the past.

If you hear about self fulfilling prophecy, this makes technical analysis valid because all traders is using it as basis with their trades. This creates a mass following to the signals given by technical analysis that’s you should use a technical analysis and patterns that is common and popular to guarantee that everyone is looking for it as reference with their trade.

The financial market is unpredictable, for me the best approach is simply not relying on only TA but also having a Fundamental backings of what the market is saying atleat to give you an edge and a direction in the market. Every trader need to have confluence and ensure all are met before they risk on any trade.
We must know the Market  does not respect anyone, and as such we only participate in a game of probability but with an edge we are good to go. So you do what works for you as  all approach have limitations, you just have to refined it as it suites you. Some use indicators, Support and Resistance, ICT, Algo, SMC, OR, etc all this is geared to make profits off the market in essence we see it on the trader to build on this and simplify it to be profitable in the market.

Once a trader can can remove every limiting factor in his system nothing again can tie him down. Rinse, Repeat and Refine.

Technical analysis is not 100% accurate I mean there is no analysis that always hit 100% win rate without a single loss or else maybe people are using the technique all the time.

To be honest, TA is reliable when much of people know the technique ex. EMA 100 and 200 is well know moving average to determine long term trend and the price usually reject at that level for 70% all the time I believe because a lot of people believe in it. or simple TA like basic supply and demand zone or support and resistance zone is has 80% accurate in my opinion

First of all, external market data can be used for technical analysis. People are constantly using them as data points and consider if some rumors for example have already priced in. Or if they will cause a perfect storm and trigger bots and traders to complete some patterns in the chart. And obviously sell the news is something people are waiting of if they know the date when rumor might get official press release.

And no trader trusts TA 100 percent certainty pecause accuracy of any TA, no matter what indicators they use is FAR from 100%. Percentage accuracies of it are really hard to measure because different time frames, different markets, different indicators can work very differently. It's far from exact science and i totally get why some people don't trust TA at all.

But imho we can't really judge TA as whole field of it consists of a huge spectrum of different techniques. Different traders don't trust different indicators or patterns. And some of them are laughing at meme lines, while they swear by elliot wave. And some are laughing trend lines calling them meme lines, and are perfectly fine using ichimoku cloud or combinantion of indicators and patters themselves, even if they would have so many settings and variables to look for that it would be impossible to measure any kind of accuracy for it.

And basically anyone can create an indicator. So if my indicator of solar eclipse cycles vs wick lenghts or something like it doesn't work, does that mean TA in general isn't accurate?

Personally i don't even care. I gave up complex indicators long ago as i can't calculate any probability for them. And i am using combination of "feeling" of the markets that comes with experience and combining them with most common patterns that i know people will be reacting to. And mostly looking at the big picture of the chart.

Tge technical analysis could be a reliable means to trade the forex market but not in the crypto market since we have different projects that the movement is not dependent on the market chart but rather on pump and dump. This happens in every cryptocurrency projects so we must be ready for the heart attack if we are truly a technical trader in the crypto space. Things mostly move the market without any technical analysis. It is information and hype that controls the market we need to be prepared for it.

Haha you got it right! People would really be making out those kind of sentiments basing up into the emotions and mindset that they do have specially on the time that they have failed on doing trading
and this time via making use of technicals and with too much failure and loses then they do really came up with this kind of idea that it doesnt really work and its not something that you could really be able to rely on
without even trying out to realize that these tools are the main ones being used by most traders. You cant really be able to read up a chart without having these indicators on which you cant really be able to make use of price actions anytime. This is why it would really be that normal that traders would really be making use of these indicators.

Naked trading could be considered to those people who are already that professional but still we would really be needing up to make use of these tools so that it could make out that reading up possible
entries and exits which we do know that it would really be relevant or something important. Also, not all the time this market would really be having news or major events on which
you could really be able to watch for.

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.