My Overall Opinion on Technical Analysis - Does it "Work"?

Hey guys, I wanted to make this post to give my honest beliefs on whether Technical Analysis "works" or not. The main reason I felt the need to write this post is because people like @haejin give it a bad rep and I will go into why in more detail.

What I am going to say firstly is that I am just writing my beliefs on this post and I will leave it at that. I have learned if someone disagrees strongly then I cannot change their mind and honestly it takes way too much energy to try and convince people of anything, especially for TA on here when you have a reward pool raper who, in my honest opinion, has no experience trading markets with real money.

Does TA "work"?

First thing I would say here is that is a question that people ask who seem to want a black and white yes or no answer. I refuse to give a simple yes or no answer because it all depends on what your definition of TA working is. For example, 1 person might say that if you cannot predict every one of Bitcoin's moves then TA doesn't work. Another person might have the belief that if you can't predict the market 50% of the time successfully, then it doesn't work, etc., etc.

My belief is that Technical Analysis requires a lot of patience and therefore being able to just watch the market move for extended periods of time before you actually buy or sell. I have the belief that there are definitely opportunities that are very predictable with good, SIMPLE TA. So there is two parts to that, allow me to explain them both. Firstly, I say that there are opportunities that present themselves in financial markets that can be predicted. It is my belief that you cannot predict every move no matter how "good your TA is". It baffles me when I see people trying to predict 3 or 4 future waves of price movements. Are you some sort of psychic? Lol. And as I have said, people like Haejin who post analysis like this give real TA a bad reputation.

The second part of what I said above was that opportunities can be predicted with good, "SIMPLE" TA. I am a very strong believer and have been for years that the more complicated your analysis is the less effective and the less successful it will be. Why do I think that? Well, think about why TA works... TA works mostly, in my opinion, because we have laid down a set of rules for where it is a good place to buy or sell based on the long-ago established rules of good TA. Without going into much detail, generally you buy just above strong support and you sell just below strong resistance, or you buy or sell on break outs of congestion patterns. I believe that the simplest aspects of TA, like support and resistance, trendlines and simple chart patterns, are the best predictors of price movement because even a donkey (sorry Haejin) can plot these on their charts. If most people see the same thing then they will buy or sell as a collective.

That is what makes TA "work", and the accumulation of people seeing the same buy or sell signals at the same time as a lot of other people do not come around every day, so you need to be patient and wait for the highest probability opportunities. If you are trading every day just because you want to then you are a sucker and not a good Technical Analyst at all, in my mind. This rules Haejin out from being any good at Technical Analysis if my beliefs are correct, because of the following reasons:

1. His analysis isn't simple as he tries to document every wave movement through the Elliot Wave Theory (which in my opinion is an absolute horse shit theory; its a confirmation bias thing, if you spot price movement that looks like elliot wave theory once in a while you think it's great, but you ignore the fact that markets hardly look like elliot wave theory at all the other 90% of the time),

2. He posts analysis every day on Bitcoin, obviously because he must post to rape the reward pool, and posts small time-frames like 60-minute charts (again if you are going below 4-hour charts you have no patience and are just gambling).

One thing I wanted to expand upon is reason 2. Once your job (yeah I know raping the reward pool isn't really a job but you know what I mean) is to give people analysis of financial markets, and one day nothing is happening, and no high probability trade set-ups are occurring (which is a lot of days), what do you do? Just not post that day because you have no legit trade signals? This is where it leads people to becoming too in-depth with their technical analysis and makes them try to predict every movement. When really they should be honest with their fans and say "I will not be posting any analysis today because I have no idea what the market will do next, not yet at least".

So, overall, some people will say TA doesn't work and some will say it does. They are both correct because it is not a black and white issue. If you are not willing to wait around on only the most obvious of buying and selling points occurring then please do not put your money into financial markets, because over the long-run you will definitely lose it.

That is all I am going to say on the subject, now let's get back to watching Bitcoin and find out if it is going to break up or down out of this Ascending Triangle!

Legal Disclaimer: This is just my analysis and not to be taken as professional financial advice. Do your own research beyond what you read in my blog posts and make your own decisions based on your beliefs about what to invest your money in.