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Re: Technical Analysis: Is it voodoo? Or does it work?
Technical analysis, also known as charting, is the study of the trading history (the price and volume over time) of any type of security (stocks, commodities, etc.) to attempt to predict future prices. In its purest form, technical analysis is concerned only with the actual price behavior of the instrument, based on the theory that all other factors affecting valuation will be reflected in the price before an investor can become aware of them through other channels.---wikipedia
Like it or not, if you use TA you are assuming that EVERYTHING THAT IS KNOWN ABOUT A STOCK, COMMODITY, INDEX, OR CURRENCY IS REFLECTED IN PRICE.
Does that mean that there is no such thing as a news surprise? Of course not. However, that news event will be immediately reflected in price and usually before most retail traders can react to it.
My personal dislike of the above definition has to do with the word PREDICTION. The future is unknown and not knowable. Prediction is not possible nor necessary.
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