There seems to be a good amount of youtubers that make videos and teach this. Momentum trading, support/resistance, moving averages, scanning high volume stocks, etc. It seems believable, similar to how someone can make money playing poker.

Has anyone devoted time to trying it out? Seems like it could be super high variance with no edge. Also, you are likely to be trading against AI bots who can crush you with high frequency trading. Still, seems like there are enough successful traders out there that are finding edges. So who knows?

2 hour video of the truth.

If edges exist in TA they will necessarily be very small. Thus TA is useless (when applied to US equities, it works better in manipulated markets like China and markets with enormous directional flows like commodities)

It has been hashed out here many times. It has its believers and non-believers. A lot depends on your goals and time frame. I use a lot of TA in my trading but TA casts a very large net. In essence it is just a visual representation of the marketplace. Most naysayers have no real understanding of TA and grab onto an aspect of TA (ie chart patterns) and demonize the entire disciple. I tend to only use it in the very short term and stick with the proven aspects like support/resistance, momentum and trends coupled with volume. There is no "right" way to do it or approach it as it will vary with time frames and risk appetite. I think in the very short term that TA is extremely useful and gets less and less useful the further out on the time horizon that you go.

The way that I trade I see TA as more reactive than predictive and a way to put the odds in your favor. An example of this would be if A happens and then B happens then C will happen 65% of the time and D will happen 35%. It doesn't mean C will happen but it is a better bet than D. Like a flush draw when the pot odds are good you call/make the bet even though there is no guarantee that you hit the flush.

I don't plan on arguing any more with the ignorant naysayers but here are a couple of links of this discussion here in the past. Eboro gives some excellent insights into what technical traders are trying to accomplish. It's just a big old numbers game where you are trying make higher percentage decisions with no guarantees.

https://forumserver.twoplustwo.com/3...92/?highlight=

https://forumserver.twoplustwo.com/3...nical+analysis

These 2 threads give the gist of past discussions. TA may fit your personality and style or it may not. Certain parts of TA seems to make perfect sense and some of it seems extremely hokey. I tend to keep it simple and short term letting the market action tell me what to do when certain market actions present themselves. This focuses a lot on risk vs. reward based on both stop/target management and what the market action is telling me. It took me a lot of study and experience to reach that point. Good luck!

Short answer is yes. There are very successful traders that work on price movements alone, mostly on shorter time frames but some trade only on TA even for longer (I mean 6 months+) time frames.

For longer time frames, most TA practitioners are also looking at the fundamentals.

A lot of the time the greatest insight TA gives is when the movement of the TA (price patterns) bear no resemblance to apparent changes in the underlying fundamentals of a firm. That can tell the practitioner a lot about how the market views a certain stock and what "fundamentals" have already been priced in.

Citation for this claim? If TA has zero edge, there will be very successful traders that work on price movement alone, so this sentence adds exactly zero evidence to the claim that TA might work.

There are too many prop trading firms who manage to consistently profitable for TA to have no value.

I've said those guys are picking up crumbs for the most part but it's a lot of crumbs that meet the definition of "successful" for most people.

I have no problem with the notion that algos paying far less than retail fees can pick up crumbs using TA and make a decent earn leveraging large amounts of capital.

The fact that these guys exist and have decent dollar volume means that the retail trader using his dumb charts is going to have zero, if not negative, edge after fees and spread. Rocket scientists are using sophisticated algorithms and professional traders leveraging small edges well with very low fees means the retail is starved out.

This isn't true in some markets but it's true in US equity markets and it's not close. mrbaseball is a commodity trader, I have no opinion on TA in that and the literature shows some value for TA in commodity markets.

Thanks, Mr. Baseball.

Took me a couple hours to read through both of the links that you posted. TA seems like it would fit a poker player's personality since it's about looking for high probability setups and situations and following good risk management when executing a trade.

Is the variance as high as it is in poker? For example, do you ever have losing months or lose 15 out of your last 20 trades, even though you seem to be getting your money in good in +EV spots? Technically, you could still be a winner if you hit homeruns on your 5 winning trades. Do you win greater than 50% of your trades? Or is it more like set mining in poker where you miss the flop 1 out of 8 times, but the times you hit you hit big.

Ha. I remember watching this about a year ago. I'm pretty sure he uses fundamental analysis to trade options. It made me consider trading options. I researched further it further and was pretty overwhelmed.

If he has a system working for him that I'm not surprised he would trash the other way of doing things.

There is probably a greater ROI and chance of getting rich trading the way he does, but that doesn't mean someone couldn't make decent money trading technical analysis.

TA should only work if everyone believes in it, but then if everyone believes in X then you can think 1 level ahead and do Y but then people will adjust to Y and you will have to do Z, etc. It's like levelling in poker. But if no one believes in it then it doesn't work because you're looking for patterns that don't exist.

If it did work, wouldn't people just write algorithms to make millions of trades a day based on TA and just literally print money? Unless you're getting in a levelling war with every other computer algorithm doing the same thing.

This is a common misperception even if it is correct that patterns don't exist. I use TA every single day and never trade off of "patterns". TA involves much more that has absolutely nothing to do with chart patterns.

There is variance but it depends on a lot of things. There are higher and lower variance approaches and since there are infinite ways and time frames to trade as well as infinite ways to use TA it all depends on the individual trader and style.

People do. And it doesn’t require that everyone believes in it, it just requires that some market participants are reactionary to change in ways that others can anticipate.

It’s just a means for testing hypothesis wrt the relationship between variables in the past to make informed predictions about how it will in the future.

The problem is that even one motivated, capable person doing it dries up opportunity for everyone else and to make anything you need to find something that others haven’t.

This is so wrong it's amazing. Every sentence is wrong. If everyone believes in it, who is the counterparty you're making money from?

And why does TA require people to believe? One of the (few non-******ed) rationalizations for TA is that some of the signals involve you piggybacking off/front running large position holders wanting to enter or exit large positions, creating reliable patterns.
This is my favorite thing about TA. Some dick with zero intelligence or original thought thinks he can print money by looking at lines on charts competing with MMs and fast, rocket scientist programmed algos as his counterparty, looking at the same numerical patterns that they are. While paying large spread and fees. You have to be brain dead.

There's a whole industry preying on fools like zero-thought fools like mrbaseball (in US equities)

Ahh! There's the personal attack I knew this thread would resort to trollish name calling. It would be great to have a respectful and intelligent discussion just once.

I have found TA to be useful in blown out markets and less useful in low-volatility high liquidity markets.

So I'm skeptical of people who claim to make a living solely off of TA, there's more intricacies in the markets just in terms of participants and fundamentals and order flow.

But I'm also dismissive of people who think TA is useless, the fact of the matter is when liquidity is blown out and the market is flying around, those meaningless little lines of moving averages, vwap, fibonacci etc tend to hold up far more often than noise. that's off of 5 years of observation as a winning scalper. shrug.

feel like this argument has been perpetuated word for word like 5 times in this forum, so i'll just pop in here every time TS decides to harp on something as completely meaningless when the truth is usually more greyed and subtle.

It'd be wonderful. But you show extreme disrespect by avoiding any questioning or rational analysis of your bold ridiculous claims. You speak in meaningless weasel words and can't even understand basic reasoned objections.

Your're basically: It works bro! Trust me! with zero intellectual understanding behind it and not even the most basic noise correction that any non-tard who did this for a living would do. You confuse commodity markets where the literature shows some possible edges to US equity markets (which is what we're talking about) where the literature strongly show zero edge after fees and spread.

So you're not to be taken seriously, sorry. Unclench your intellectual anus and come have a chat,bro. Right now you're a weak tight fish.

there are lots of equity index futures fwiw SP500, NQ, Dow, Russell

by no means the same as individual equities, but its not like its commodities either. shrug.

So ask a question. All you have done is insult and belittle anyone with a view other than your own. We have even caught you explaining one of your setups once which was 100% TA. No winning trader doesn't look at charts or isn't influenced by price action and that is all that TA is, a visual representation of price action.

That's called backtesting. You might find statistical arbitrage and pairs trading interesting.

Yes, it works.

Most people will fail, not due to "TA not working" (whatever that means) but due to a failure to manage risk or a lack of discipline.

People say it doesn't work because they can't make any money doing it(toothsayer). Therefore it all has to be a scam if they can't do it. Their ego can't fathom that someone else can do something they aren't capable of.

It does work and people make huge amounts of money using it.

Clown,
I have a math degree, TA isn't rocket science bro. I've even shown long-term idiot TA users how to improve the signals they're using by doing basic noise correction (despite doing it for years and claiming expertise, they were too incredibly stupid to realize that the market is a driver of many inflections and thus they were getting false support signals generated by the market's effect and not the stock).

Which people are these? Isn't it amazing that there are "huge amounts of money" on the table using purely mathematical full information constructs, but none of the $100s of billions of professional capital who can hire rocket scientists to take this "huge amount of money" fail to exploit these edge, thus remaining available for the retail trader? Instead, the large professional firms doing millions of trades pick up profit at a tiny level (leveraging large amounts of capital) that would sink a retail trader due to fees + spread. Yet some cucks at learnTANow.com ($99/month!) and some dumb retail traders have this all sorted for "huge amounts of money" with their tiny capital?

This book (or at least it's conclusions) is also worth a read: Evidence-Based Technical Analysis

Juk

I am using something which probably most of you wouldn't consider traditional TA but it's based on purely price action and volume. I use VPOCs, other important volume summits and value area highs and lows out of the monthly/weekly/daily and actual contract volume profile as sup/res levels. Now I don't blindly place my limit orders at these levels, I look at actual order flow for confirmation and context has to be right.
I trade mostly FGBL, CL, GC and ES futures, but this also works very well for stocks.