Reading Assignment: Reading Assignment: Does Technical Analysis Work?

TA & Algo Trading Course
#141

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.
It is a risk management tool that can be used to derive probabilistic, actionable, and risk-defined trade setups on an instrument.
Summary: technical analysis is 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?

Technical analysis can identify and execute a trade setup offering asymmetric Risk:Reward.

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

Technical analysis generate risk-defined trade setups that can in fact work.
Technical analysis can identify and execute a trade setup offering asymmetric Risk:Reward.
Technical analysis is a risk management tool that can be used to derive probabilistic, actionable, and risk-defined trading setups on an instrument.

#142
  1. “Technical analysis is a probabilistic risk management tool that can i) generate new trade ideas ii) convert price forecasts into actionable trades.”
  2. Better odds
  3. To summarise the authors arguments regarding TA, if used with discipline, structure and objectivity, don’t try to use it as a mirror ball or outperform professionals, then it works like a probabilistic tool that can aid in making calculated risk/reward decisions.
#143

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?
Identify and execute a trade setup offering asymmetric Risk:Reward.
3. How would you summarize the authors argument that technical analysis works?
It works as long as it helps the trader with making better decisions about trades.

#144
  1. The author defines technical analysis as;

“the practice of analyzing the price history of an instrument in order to make actionable, risk defined forecasts of it’s future price… Technical analysis is a probabilistic risk management tool that can generate new trade ideas and convert price forecasts into actionable trades."

He also quotes Wikipedia’s definition, which is;

“an analysis methodology for forecasting the direction of prices through the study of past market data”.

  1. trade asymmetric risk: reward trade setups.
  2. Technical analysis can give you an advantage at whatever scale you are trading at. Not all technical analysis, trade management and traders are equal.
#145
  1. a risk management tool that can be used to derive probabilistic, actionable, and risk-defined trading setups on an instrument, not bout knowing/deducing the future price
  2. analysing price history to make actionable, risk-defined forecasts
  3. It works when it helps traders identify and trade asymmetric risk
#146

1. How does the writer define technical analysis?
Technical analysis is a risk management tool that probalistic, actionable, and risk defined trade set ups.

2. What are technical analysts looking to identify in the market?
They are looking for better odds for their trade setups.

3. How would you summarize the authors argument that technical analysis works?
It is a tool you can use to reduce risk in your trade setups. Its not an exact science but it can be one of many tools used to give you better odds for your trade goals.

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#147

  1. How does the writer define technical analysis?

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

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

  4. The writer defines 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.

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

  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. technical analysis ‘works’ As it helps traders identify and trade asymmetric risk/reward trade setups. Traders do however have To work at systematically and selectively.

#148

  1. TA is the probabilistic risk management tool that can
    a) Generate new trade ideas
    b) Convert price forecasts into actionable trades.

  2. TA’s are looking to ID risk defined trade setups.

  3. TA works because it helps traders ID and trade asymmetric risk:reward trade setups.

#149

“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.”

  1. What are technical analysts looking to identify in the market?
    Short term trading patterns, market levels, and trading ideas.
  1. How would you summarize the authors argument that technical analysis works?

Basically, technical analysis in the hands of an undisciplined, “want to get rich quick” speculator is a one way ticket to wreck city, as Ivan would said. However, the author emphasizes that if you are willing to put in the work (balance fundamental and technical analysis), discipline, patience, and a consistent strategy technical analysis will enhance and steadily grow your portfolio by giving you fair estimates of wise prices and times positions to be opened and closed in the market.

#150

  1. How does the writer define technical analysis?
    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. What are technical analysts looking to identify in the market?
    They are looking for similar patterns in the past. Based on the patterns they can make calculated risks and take risk defined trading actions.

  3. How would you summarize the authors argument that technical analysis works?
    As in any discipline the performance differs from practitioner to practitioner. There are traders who apply systematic/selective strategies with calculated risks, showing better results on the mid to long term than traders who don’t take it seriously and act more like gamblers.

#151

1- The writer defines technical analysis in two ways:
A- As a risk management tool that can be used to derive probabilistic, actionable, and risk-defined trading setups on an instrument
B- As the practice of analyzing the price history of an instrument in order to make actionable, risk-defined forecasts of its future price

If I were to summarize what technical analysis is, I’d say it’s using a tool which tracks past indicators to help traders predict (as best as possible) the risk involved in making specific trades.

2- By using technical analysis, traders are looking to identify which moves will allow them the magical asymmetric risk:reward trades. So in my view this means that traders are looking to use tools to make trades with minimal risks and high rewards, based on past performance indicators.

3- The reason that many naysayers think tech analysis doesn’t work is because they aren’t looking at the full picture, which is that HUMANS are at the helm! And humans have different tendencies in the way they go about everything. In this case, the author is making the argument that using the tech is not to blame, it is the system implemented by the person operating the tech that may not be effective or consistent, therefore leading to analysis that isn’t peak. So in other words, tech analysis serves the purpose it is supposed to serve when backed by discipline and consistency. It is not an extension of a magic wand per se!

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#152
  1. How does the writer define technical analysis?

He defines technical analysis as a probabilistic risk management tool that can
a) generate new trade ideas
b) convert price forecasts into actionable trades.

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

Technical analysts are looking to identify possible „edges“ and execute a trade setup offering asymmetric Risk:Reward.

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

Author argues that as long as technical analysis helps traders identify and trade asymmetric risk:reward trade setups, then it works. It will work much more likely if you do it properly and take it seriously (disciplined, systematic approach, etc.). In other words technical analysis is a tool and the tool is as good as its user.

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#153

  1. TA is a risk-management tool looking at the probability and risk-defined trading setup on an instrument.

  2. Technical Analysts look to identify a setup that would give them a higher probability of profiting when making a trade in the market.

  3. Fro TA to work, you need to be disciplined, Consistent, and patient on your TA. You will also need to consider both TA and FA to minimize you risk when setting up a trade.

#154
  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.

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

they try to find patterns.

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

It works to reduce the risk in a trade. We can improve the risk reward.

#155
  1. How does the writer define technical analysis?
    It’s a practice of analyzing the price history of an instrument in order to make actionable risk-defined forecasts of the future price.
  2. What are technical analysts looking to identify in the market?
    To generate new trade ideas that can be set up and offer asymmetric risk rewards.
  3. How would you summarize the authors argument that technical analysis works?
    As long as it helps traders identify and trade asymmetric risk:reward trade setups, then it works.
#156
  1. How does the writer define technical analysis?
  • The writer describes 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
  1. What are technical analysts looking to identify in the market?
  • They are looking to carve out an edge with a positive expectancy in the markets that they trade
  1. How would you summarize the authors argument that technical analysis works?
  • I would sum up as follow: Technical analysis is a risk management tool that can be used to derive probabilistic, actionable, and risk-defined trade setups on an instrument
#157

  • 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

  • What are technical analysts looking to identify in the market? They are looking for probabilistic upward trends for the future.

  • How would you summarize the authors argument that technical analysis works? Technical analysis can work to your advantage if it used correctly. If not it, it’s just like gambling.

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#158
  1. Technical analysis is a risk management tool that can be used to derive probabilistic, actionable, and risk-defined trading setups on an instrument.
  2. a trade setup offering asymmetric Risk:Reward
  3. As long as it helps traders identify and trade asymmetric risk:reward trade setups, then it works
#159

  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 analysts are looking for risk-defined trade setups.

  3. How would you summarize the authors argument that technical analysis works?
    TA is not a price prediction or market prediction crystal ball, it is a tool set used by traders to build a set of rules (market edge) used to identify higher probability trade setups along with risk management.

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#160

  1. Technical analysis is a risk management tool that can be used to derive probabilistic, actionable, and risk-defined trading setups on an instrument.

  2. They are looking to identify and execute a trade setup offering asymmetric Risk:Reward.

  3. Technical analysis is only as good as its user, if it used with discipline, it can render a higher probability of successful trades.