Quote from: jamids on October 18, 2018, 12:09:44 AM

Quote from: Embeco on October 16, 2018, 09:30:12 AM

I have to say upfront that I'm no fan of technical analysis, even in traditional asset markets. There are 2 main reasons for this:
1) There is no scientific proof that technical analysis works at all. The only correlation between technical analysis and true market movements is that it is widely believed. And this leads to the next point
2) TA is a self-fulfilling prophecy. If people stopped believing in it, it would stop working right away. If people find new patterns they only start actually working once they get enough traction for other people to believe in them.

Yes, using technical analysis is like knowing what other people are thinking. It is indeed a self-fulfilling prophecy wherein when the group of people thinks that it will have a support or resistance in that level then it would come true because many of them believe so. After all, technical analysis is studying the previous behavior of the market hoping that it would be the same way in the future. If not, then we have those stop losses to lessen our risks of having bigger losses.

Technical analysis helps traders predict trends. of course traders will buy in support area and sell it in resistance area. and i think of course traders will act according to trends and news that occur