Technical analysis is one technique used for analyzing the performance of markets and stock picks, (and other areas of business), by analyzing key trends and data. Most often, the variants analyzed are pricing, volume and time scale, though many other factors can be taken into the equation. A lot of the studies are completed through charts, and have since given rise to analysts being dubbed "chartists".
For many, technical analysis lacks any real theory that underpins it, and is subsequently without credence. However, others argue that its results are justification enough, and point to its correlation to behavioral finance.
Another objection to the technique rests upon how, if it is so sound a function, that automatic trading strategies should be a matter of course in its development; that this is yet to be the case is held up as proof is doesn't work.
A lack of evidence that technical analysis was the sole reason for successful strategy trading has also been held up for discussion in the camp against its merits. However, chartists argue that back testing evidence has been delivered; simply that it is not understood by the detractors.
However, the basis that it does work is founded on proven facts that history, and trends and past performance do indicate the future. It is only sensible therefore to expect it to work. That experience in the field is applied to these studies too, suggests it is sound.
Advocates of the system, and objectors to it, do seem to come together in some sort of agreement however. Whilst both have very differing views, both state that technical analysis should be used not as standalone technique, but more just one of several weapons to understand fluctuations in the market and apply strategy effectively. - 23309
For many, technical analysis lacks any real theory that underpins it, and is subsequently without credence. However, others argue that its results are justification enough, and point to its correlation to behavioral finance.
Another objection to the technique rests upon how, if it is so sound a function, that automatic trading strategies should be a matter of course in its development; that this is yet to be the case is held up as proof is doesn't work.
A lack of evidence that technical analysis was the sole reason for successful strategy trading has also been held up for discussion in the camp against its merits. However, chartists argue that back testing evidence has been delivered; simply that it is not understood by the detractors.
However, the basis that it does work is founded on proven facts that history, and trends and past performance do indicate the future. It is only sensible therefore to expect it to work. That experience in the field is applied to these studies too, suggests it is sound.
Advocates of the system, and objectors to it, do seem to come together in some sort of agreement however. Whilst both have very differing views, both state that technical analysis should be used not as standalone technique, but more just one of several weapons to understand fluctuations in the market and apply strategy effectively. - 23309
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