Reading Assignment: Reading Assignment: Does Technical Analysis Work?

TA & Algo Trading Course
#221
  1. TA is defined by the writer as a tool to manage risk, by identifying patterns in the market and calculate probabilities of them happening again in the present / future.
  2. TA looks into identifying bullish or bearish patterns, enabling the trader to consider risks when taking a decision of buying or selling.
  3. As long as a trader is disciplined, patient and takes FA into account as a well, on the long term, there should be more winning outcomes when buying or selling.
#222

1.TA is a risk management tool that can be used to derive probabilistic and risk-defined trading setups of an instrument.
2.TA is not a crystal ball that says the exact price of an instrument but it helps a systematic and patient trader to have a much lower risk on his/her trades and TA is all about charts but a good trader must mind the news and the probabilities of the real world around her/himself too.
3.TA works best for who both see the ugly side and the positive side of the market and people who learned their lessons from the past market.

#223
  1. How does the writer define technical analysis?

Technical analysis is the practice of analysing the price history of an instrument in order to make actionable, risk-defined forecasts of its future price .

— Technical analysis IS NOT analysing price history to gain knowledge of the future price of an instrument

— Technical analysis IS a risk management tool that can be used to derive probabilistic, actionable, and risk-defined trade setups on an instrument

Technical analysis is a probabilistic risk management tool that can i) generate new trade ideas ii) convert price forecasts into actionable trades .

  1. What are technical analysts looking to identify in the market?

Basically repeatable patterns that may help to understand the behaviour of the market.

  1. How would you summarize the authors argument that technical analysis works?

I think the best is summarized on these sentences:

— Not all technical analysis is equal — it’s much more likely to work for someone who takes it seriously (disciplined, systematic, etc.) than someone who just takes a punt

— Don’t get sucked into the technicals vs fundamentals argument — focus on whichever works best for you and have at least an elementary grasp of the other

#224
  • How does the writer define technical analysis?

The practice of analyzing the price history of an instrument in order to make actionable, risk defined forecast of its future price.

  • What are technical analysts looking to identify in the market?

Identification and execution of a trade set up offering asymmetric Risk:Reward.

  • How would you summarize the authors argument that technical analysis works?

An analysis to predict the future outcome of a trade or outperform professional experience would be too high of an expectation. As long as it helps a trader identify and execute a trade for asymmetric gains it has done its job.

#225

1.The writer defines technical analysis by what it isn’t. He states, that it isn’t “analyzing price history to gain knowledge of future price” but instead it is “ *the practice of analyzing the price history of an instrument in order to make actionable, risk-defined forecasts of its future price."

2.Technical analysts are looking to identify better odds for their trade setups.

3.The author argues that technical analysis works because it can generate risk-defined trade setups.

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#226
  1. A risk management tool that can be used for an actionable trade
  2. An asymmetric risk/reward, an opportunity to make money
  3. I think It’s a well-reasoned approach, as neither approach TA, Fundamentals are exclusive but complementary.
#227
  1. How does the writer define technical analysis?
    technical analysis is the practice of analysing the price history of an instrument in order to make actionable, risk-defined forecasts of its future price
  2. What are technical analysts looking to identify in the market?
    Technical traders, irrespective of whether they are discretionary traders or using some sort of automated strategy, are looking for better odds and for their setups to render them profitable over enough trades.
  3. How would you summarize the authors argument that technical analysis works?
    It is a tool that can help manage risk and get better odds on decisions than 50/50
#228

  1. The writer defines technical analysis as a risk management tool --analysing the price history of an instrument-- to make probabilistic, actionable, risk-defined trading forecasts on prices of such instruments.

  2. What technical analysts are looking to identify in the market are ­­­trade setups that will help a trader meet his “goal” and “stop loss” goals, carve out an edge and a positive expectancy in the market(s) so as to execute higher probability trades with asymmetric risk-reward conditions over enough trades (i.e. higher chances of a win/profit than a loss); not to outperform professional trading desks and firms.

  3. The authors argued that technical analysis works much more likely and profitably if done well and taken seriously as most good technical traders do: with understanding, continuous study, patience, and risk management. Technical analysis works better when complemented by fundamental analysis: where TA identifies short-term momentum and FA is better for the long-term. Lastly, TA works when it helps traders find models that have higher chances of winning than losing so that the reward is greater than the risk.

#229

  1. How does the writer define technical analysis?
    The writer defines Technical analysis as the practice of analyzing the price history of an instrument in order to make actionable, risk-defined forecasts of its future price.
    And that Technical Analysis is a probabilistic risk management tool that can generate new trade ideas and convert price forecasts into actionable risk limiting trades.

  2. What are technical analysts looking to identify in the market?
    Technical Analysts are looking for positive asymmetric Risk:Reward opportunities; in other words, they’re looking for trades or positions with more potential for profit and less potential for loss.

  3. How would you summarize the authors argument that technical analysis works?
    I think the author is saying that Technical Analysis works once it is taken seriously and used with discipline and systematically as a tool to manage risk and come up with trading targets that are asymmetric risk/reward opportunities and more so if it can be augmented with fundamental analysis

#230
  1. The writer defines TA as a risk management tool.
  2. TA looks for actionable trades.
  3. TA works because it tries to find actionable trades with reasonable probabilities.
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#231

  1. The writer defines technical analysis as “a risk management tool that can be used to derive probabilistic, actionable, and risk-defined trading setups on an instrument”

  2. Most traders will outline a target where they
    1- wish to take a profit or close a trade and
    2- a stop loss where they wish to exit the losing position to prevent further losses

  3. Technical analysis is about making actionable, risk defined forecasts of its future prices. It’s not about deducing/forecasting future prices. It is about discipline, patience and a set of trading rules. It’s not about punting on bullish patterns to make a quick profit.

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#232

1. How does the writer define technical analysis?
Technical analysis is the practice of analysing the price history of an instrument in order to make actionable, risk-defined forecasts of its future price.

2. What are technical analysts looking to identify in the market?
Analysts are looking for trends and indicators that will increase the probability that their prediction of future price action and trends will come true.

3. How would you summarize the authors argument that technical analysis works?
Technical analysis undoubtedly works…
However I have learned, through my own experience, that applying TA techniques is only one aspect of trading… other major factors such as lack of risk management and human psychology contribute massively to the classic (and probably true) claim that 90% of retail traders lose 90% of their money in 90 days.

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#233

1. How does the writer define technical analysis?

He defines technical analysis as essentially a risk management tool.

2. What are technical analysts looking to identify in the market?

To identify asymmetric risk:reward trade setups

3. How would you summarize the authors argument that technical analysis works?

Technical analysis works if you take it seriously by being disciplined/systematic.

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#234

  1. How does the writer define technical analysis?
    Technical analysis IS a risk management tool that can be used to derive probabilistic, actionable, and risk-defined trade setups on an instrument

  2. What are technical analysts looking to identify in the market?
    They are looking for a profitable edge.

  3. How would you summarize the authors argument that technical analysis works?
    A) For decades both professional traders and retail traders have used technical analysis profitably. If technical analysis was not profitable they would have stopped using it.

B) A lot of they nay sayers are just trying to explain away personal losses instead of trying to learn from the losses and become a batter trader.

C) Technical Analysis will only work as hard as you do. You have to be willing to put in the time and discipline to learn what works instead of just expecting it to be some sort of a silver bullet that will slay the vampire. Neither the silver bullet nor the vampire are real. In this story the only real solution is disciplined, continuous trail and error.

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#235
  1. Technical analysis is a means be which one analyzes price history to create a risk-assessed prediction of a future price based on probability
  2. Indicators to identify a trade or series of trades that will prove profitable
  3. Some people use fundamental analysis, some people use chart analysis, a profitable trader knows how to utilize both metrics
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#236
  1. How does the writer define technical analysis?
    Technical analysis is a risk management tool that can be used to derive probabilistic, actionable, and risk-defined trading setups on an instrument.
  2. What are technical analysts looking to identify in the market?
    Technical traders/analysts are looking for better odds and for their setups to render them profitable over enough trades.
  3. How would you summarize the authors argument that technical analysis works?
    The author’s argument that technical analysis works in that it doesn’t have to predict the future. Technical Analysis works when traders identify and trade good reward to risk ratio trading setups.
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#237

  1. How does the writer define technical analysis?
    He defines technical analisis as a risk managing tool.

  2. What are technical analysts looking to identify in the market?
    They are looking for previous patterns in the price history in order to make a possible risk managed trading move.

  3. How would you summarize the authors argument that technical analysis works?
    Technical analysis its a tool that doesn’t predict the future, but gets you closer to a probability.
    It helps traders take better decisions (can measure your risk, plan your gains and your losts) instead of only guessing and gambling.

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#238

Response:

  1. The writer states that TA is more of a probabilistic measuring tool; not an exact science.

  2. They are looking to identify patterns in the market. This can be done using tools available to them to chart out price history and try to anticipate where the market will go.

  3. CryptoCred argues that TA works IF the traders using it PUTS in work. No one should just take a shot at the market without first using some kind of tool to analyze and interpret it better. Doing so is just as good as betting on black or red. Also, having control over your emotions is a must as it will help you minimize your losses and play the market more systematically. You should do your best to feel indifferent to the trades you place. Respect your stop-losses and take profit when it hits your target.

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#239
  1. Technical analysis is the practice of analyzing the price history of an instrument in order to make actionable, risk-defined forecasts of its future price.
  2. Patterns.
    3.As long as it helps traders identify and trade asymmetric risk: reward trade setups, technical analysis works.
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#240

1.How does the writer define technical analysis?

“A probabilistic risk management tool that can i) generate new trade ideas ii) convert price forecasts into actionable trades.”

2.What are technical analysts looking to identify in the market?

“Asymmetric risk:reward trade setups.”

3.How would you summarize the authors argument that technical analysis works?

It works best as a complementary trading tool among others, e.g. fundamental analysis, and is much more likely to work for someone who applies technical analysis seriously by being disciplined, systematic, etc. than someone who isn’t.

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