Is technical analysis of stock charts still relevant? I think not.?

Question

It seems to me that Technical Analysis is not worth very much and can not be used to make consistent profit trading. Hedge funds and money managers that use quant methods aren't looking at candlestick charts, they use stochastic calculus and other advanced mathematics to make their trading decisions. So what is technical analysis good for if you can't make reliable money off of it?

Answer 1

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.

Answer 2

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.

Answer 3

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

Answer 4

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...

Answer 5

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.

Answer 6

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.

Answer 7

There are in basic terms 3? Geez, if in basic terms it have been so straight forward. fee mark downs each and every little thing. fee strikes in tendencies. history has a tendency to repeat itself. assorted time frames exist contained accessible concurrently an excellent number of the time, the markets strikes on emotion -- that's ninety% psychological. those provide you with some innovations, yet in basic terms your text fabric provide you with the suited answer.