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| Here's the way I look at it.....
Supply and demand are in control of price. More supply + less demand = lower price. Less supply + more demand = higher price. That's what every economic textbook says, and that's what they teach in school. If charting worked 80% of the time, they'd be teaching that stuff in B school and everyone would be rich.
In my opinion, market particiapnts will trade fundamentals when there is data, report(s), and/or other empirical evidience to support a thesis for price moving one way or the other. When there are no fundamental inputs for market participants to digest, the market follows the technicals.......
I also believe that technical analysis gives a better idea [read: guess] of where to put entry and exit orders. The price levels that are gleaned from technical analysis don't always work since the patterns can appear and disappear when you change time frames/ number of ticks/ or adjust the parameters for the myriad of indicators. It's an inexact science; but since everyone is on the lookout for technical levels, it can become a self-fulfilling prophesy. One thing I do know for certain is that trend days can blow up your account if you're on the wrong side. And that sucks.
Good luck. | |
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Who's built a hugely successful farm on the back of technical analysis?
