Understanding Technical Analysis
There are many techniques in forecasting trends these days for stock trading; one that has been around for a number of years is technical analysis. This works by analyzing certain trends; including time period and volume, though mainly focuses on pricing in reference to these. A very complex process in many respects, it tends to center around charts, graphs and dot references.
However, whilst it sounds an acceptable technique; many actively and loudly argue against it. They claim there is no strength to the theory behind it. Those for it argue the opposite; and suggest that results generated are proof of it working.
However, countering this view are those that question why it has not led to a robust automatic trading system, however, this would of course negate the human analytical mind so often falls flat as an argument.
Other arguments against it are heard too; most loudly of all tends to be the fact that evidence of the technique being the reason for a successful strategy are never given; though this is countered by the response that evidence is given, just not understood. A weak argument for many.
The basic argument for those supporting the technique, is that it just makes sense to study past performance, pricing trends, and any areas where upon a variant and a constant can be linked. Trends in the markets do occur regularly; this is just an accepted fact; understanding where these trends are going to recur is merely applying a technique.
However, whilst different opinions are rife across many bodies; one thing does seem to bring both group together; that technical analysis should not necessarily be relied upon solely. And this is only sensible of course. After all, there are not many of us out there that go out foraging, only to place all of our eggs in just the one basket. - 23311
However, whilst it sounds an acceptable technique; many actively and loudly argue against it. They claim there is no strength to the theory behind it. Those for it argue the opposite; and suggest that results generated are proof of it working.
However, countering this view are those that question why it has not led to a robust automatic trading system, however, this would of course negate the human analytical mind so often falls flat as an argument.
Other arguments against it are heard too; most loudly of all tends to be the fact that evidence of the technique being the reason for a successful strategy are never given; though this is countered by the response that evidence is given, just not understood. A weak argument for many.
The basic argument for those supporting the technique, is that it just makes sense to study past performance, pricing trends, and any areas where upon a variant and a constant can be linked. Trends in the markets do occur regularly; this is just an accepted fact; understanding where these trends are going to recur is merely applying a technique.
However, whilst different opinions are rife across many bodies; one thing does seem to bring both group together; that technical analysis should not necessarily be relied upon solely. And this is only sensible of course. After all, there are not many of us out there that go out foraging, only to place all of our eggs in just the one basket. - 23311
posted by Mr. Forex at
2:11 AM
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