Is technical analysis of stock charts still relevant? I think not?
Mike S аѕkеԁ:
It seems tο mе thаt Technical Analysis іѕ nοt worth very much аnԁ саn nοt bе used tο mаkе consistent profit trading. Hedge funds аnԁ money managers thаt υѕе quant methods aren’t looking аt candlestick charts, thеу υѕе stochastic calculus аnԁ οthеr advanced mathematics tο mаkе thеіr trading decisions. Sο whаt іѕ technical analysis ɡοοԁ fοr іf уου саn’t mаkе reliable money οff οf іt?
It seems tο mе thаt Technical Analysis іѕ nοt worth very much аnԁ саn nοt bе used tο mаkе consistent profit trading. Hedge funds аnԁ money managers thаt υѕе quant methods aren’t looking аt candlestick charts, thеу υѕе stochastic calculus аnԁ οthеr advanced mathematics tο mаkе thеіr trading decisions. Sο whаt іѕ technical analysis ɡοοԁ fοr іf уου саn’t mаkе reliable money οff οf іt?
Tags: General Trading
Tech is one facet of analysis.
If you’ve got the time and assets to get quant analysis, more power to you. I’m betting you don’t.
Plenty of disciplined traders make very good money consolidating multiple types of input. You would be wise to investigate those and paper trade until you’re able to prevent unnecessary loss, break even on about 2/3s of your trades, and profit on about 1/3. Until you can do that, you’re trading on emotion. There are plenty of resources on this topic if you’re serious. If you’re not, let someone manage it for you. There are very successful fund (of all types) managers out there who nail it year after year.
I will remind you that hedge funds crash – and crash hard – quants or not.
Comment by robe — June 18, 2009 @ 1:30 pm
Well sure its still relevant. Technical analysis charts are a great way to see how volatile a stock is, its a great way to compare its performance with its peers, and with the market at a whole. A technical alalysis chart is also a great way to find out the volume of shares being bought and sold. I use charts with every stock I own, and its also a way that I make decisions what to buy in the future.
I love stock charts.. But honestly, I can find more information form a companys income, balance, and cash flow statements. So I guess in some way’s, you’re right about charts being somewhat not important.
Comment by dkwr14 — June 22, 2009 @ 12:03 am
many traders are not that knowledgeable and thus many do not stay in the business long term
the day traders are a subset with same characteristics.
people who stay in the business long term rely on in depth knowledge of the individual companies in addition to technical anlaysis.(heard of Warren Buffet) Some may get lucky just using technical analysis but luck typically doesn’t last long term…
Comment by mrrosema — June 23, 2009 @ 6:29 am
I think that any broker worth his salt has a great research department behind him, keeps up with industry trends, looks for the future market and places his clients where he feels they will achieve their goals. If that is technical analysis, I disagree with you entirely.
Comment by googie — June 25, 2009 @ 11:02 pm
Many people follow technical analysis. If enough people believe in the system then the stock price will follow. So does it matter? Yes, if enough people have faith.
Comment by William H — June 26, 2009 @ 12:21 am
Technical analysis is very relevant.
Although I’m not a chartist, I do use charts for trends, support and resistance points, I would be a damn fool not to.
Hedge funds bulley their way through the market, and many times don’t get the prices they should. One of these days, the regulators will be chopping away at hedge funds.
Money Mangers most certainly do use technical analysis..
So you can go ahead and trade blindly by not using technical analysis, it’s your money.
As an investor, you may not always get the bottom, but you’ll be darn close, you may not sell at the top, but you’ll be close.
Fundamental analysis can tell you what to buy/sell and Technical analysis can tell when to buy/sell
Comment by A nobody — June 28, 2009 @ 7:22 pm
well, it does if you are talking about ultimate oscillicator
indicate overbought oversold condition better than most
Comment by Bulls VS Bears — July 1, 2009 @ 4:49 pm