The effectiveness of technical analysis varies and
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Posted On: 06/10/2018 3:01:59 PM
The effectiveness of technical analysis varies and depends on situations, in an idling and non-event environment the oscillating bio-rhythm may persists and is predictable, but when the system is upset by unexpected events, the prediction of the system fails. One of Newton's law also states that an object will remain in a state of rest or perpetual motion unless it is propelled by an external force. Most equations of physics are not universal, they are conditional and are valid only under certain conditions.
https://en.wikipedia.org/wiki/Boyle%27s_law
Nevertheless, trading stocks is like navigating a plane, a pilot needs various instruments to monitor many conditions and to make judgement in order to maintain a safe flight. Without any navigation instruments, the pilot is like flying blind folded, will lose sense of direction and will end up in crash and burn.
Similarly, investors investing without any technical indicators but only by guessing, hunch or news will not be successful investors. Quite often buying after good news can be disastrous as "buy on speculation, sell on good news" is a frequent phenomenon. There is no trading system that works under all conditions, if there is, then technical analysts wouldn't be selling their system to investors for paltry of profit but making million of dollars with their own trading system. Simulating some trading systems over a period of time, I found that the best outcome is breaking even. The safest and most profitable system I found in commodities future trading and in stock trading is buying at rock bottom prices and hold on to it for a longer term, but such opportunities may come only once or twice in one's life time, so if you found it, grasp it and never let go.
https://en.wikipedia.org/wiki/Boyle%27s_law
Nevertheless, trading stocks is like navigating a plane, a pilot needs various instruments to monitor many conditions and to make judgement in order to maintain a safe flight. Without any navigation instruments, the pilot is like flying blind folded, will lose sense of direction and will end up in crash and burn.
Similarly, investors investing without any technical indicators but only by guessing, hunch or news will not be successful investors. Quite often buying after good news can be disastrous as "buy on speculation, sell on good news" is a frequent phenomenon. There is no trading system that works under all conditions, if there is, then technical analysts wouldn't be selling their system to investors for paltry of profit but making million of dollars with their own trading system. Simulating some trading systems over a period of time, I found that the best outcome is breaking even. The safest and most profitable system I found in commodities future trading and in stock trading is buying at rock bottom prices and hold on to it for a longer term, but such opportunities may come only once or twice in one's life time, so if you found it, grasp it and never let go.
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