Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

amz

Does Technical Analysis Work in Nonliquid Markets?

Recommended Posts

Technical anaylsis tries to profit from past price patterns. In order for this to work, the stock must attract numerous traders and investors. Afterall, isnt technical anaylsis a study of human behavior?

 

My question is can technical analysis be applied to non liquied markets? Wouldn't illiquid stocks be a victim of market manipulation? Isnt it hard to trade the charts under these circumstances?

Share this post


Link to post
Share on other sites

I am sure if you went through a hundred charts of illiquid stocks you will find cases where TA has workd and cases where TA has not.

 

I don't think its 100% correct to say TA works in every market. Afterall you trying to point out patterns from a chart and even by coincidence you will find a pattern that resembles technical analysis.

 

Pure technical analysists will probably argue that TA works even in nonliquid markets. But they fail to bring out the cases where it didnt work. If you are planning on trading nonliquid markets with strictly TA, my advice is go for it. Just keep your losses minimal and ride out your winners.

Share this post


Link to post
Share on other sites

I used to be a strong advocate of technical analysis but each day my feelings for TA is diminishing. There are some patterns that remain valid but I am starting to think that it has nothing to do with the pattern.

 

An ascending triangle is a pattern where a breakout to the upside is expected. However, to me this is simply price making higher lows and hugging the upper resistance line. Technicians choose to call it a pattern.

 

A bull flag is simply a small sell-off. There is simply more demand than supply. You can just watch volume to know price will probably lift instead of going crazy over a bull flag.

 

A head-n-shoulders pattern is simply price unable to test the previous high. There are sellers rushing in to sell before price can even test the previous peak. Isnt this an automatic bearish signal? Why bother making rules such as "Short the neckline!"

 

So technical analysis is slowly fading in my trading strategy. I am still trying to organize my thoughts on why I do not like TA anymore. But currently at the moment it seems like bunch of BS.

Share this post


Link to post
Share on other sites
I think technical analysis is still valid. They work because alot of people still follow them.

 

Yes, you are right about that. I would be wrong to say TA does not work completely. I cant quite explain it in words... somehow I dont like it. I think there are better methods to trade the markets.

 

I just think there is no need to follow patterns when all you need to look at is price action. Price and volume pretty much tells you all you need to know.

 

I am sure many traders would disagree.

Share this post


Link to post
Share on other sites

There is money to be made in these emerging markets but if you don't know what you are doing, you better stick with the markets you know.

 

Also, I am sure there are ways to get reliable information on a company. Why don't you contact their investor relations department?

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • ...hallucinates.... Student: “What if we gave the monkey LSD?” Guru: “The monkey already did LSD”
    • Question: To those that had/have cancer, what were the signs that made you think “something is not right here” to make you go see a doctor? Answer: So, 5/25/2018, I woke up, got ready for work, and as I walked to my car, I started gagging. Like something was stuck in my throat and I needed to clear it. And then it went away.   But 10 minutes after that, I was T-boned at 40mph on the driver side door. But what made me see a doctor was while my muscles felt better and bruises were going away, the gagging still continued, I started having fevers, my neck felt swollen, I was having such a hard time breathing, and I'd have random sharp pains in my chest, but not from where the seat belt saved me.   2 weeks after the accident, I finally see an urgent care doctor, who looks me over, tells me I'm fine, but luckily requests a neck X-ray. And I ask for a chest X-ray, which he rolls his eyes but let me have (most of my pain was in the neck, so I understand).   The very next day, he calls and says “So, that chest X-ray shows there's a 4 inch mass on your heart and lungs, and your lungs have been filling up with fluid, as well as in your pericardial (heart) wall. We need you to come in tomorrow.”   Turns out the big mass, due to the accident, caused my heart and lungs to tear and fill with fluid, the swollen neck and gagging was caused by 2 metastasized tumors, and the fevers and weight loss were symptoms. Stage 4b Hodgkin's Lymphoma.   But thankfully, we went very aggressive with chemo (and had a lot of bad side effects that don't normally happen to patients), and now I'm about 16 months cancer-free. Yay lucky X-rays! Rachel Jurina, Quora Source: https://www.quora.com/To-those-that-had-have-cancer-what-were-the-signs-that-made-you-think-something-is-not-right-here-to-make-you-go-see-a-doctor   Profits from free accurate cryptos signals: https://www.predictmag.com/  
    • As a man, the reality of life is the harshest part. I don’t mind looking older or becoming weaker over time; it’s nature.   Have you ever heard that the only people who will be loved unconditionally are women and children? Men will only be loved as long as they can provide until they are no longer needed. It doesn’t matter if you already did your best to get your kids to the best school or get the best things for them, if you stop before they’re done with it, there will be no thank you. The only thing they will remember is that they have to quit school at 15, ignoring all the previous 15 years of life you provided for them. The only people who will accept you, no matter what, are your parents. But in this situation, you might be that ungrateful child.   EDIT: Wow, I didn’t think this would get so much attention.   For those who disagree, I can only say that everyone has their problem. If you don’t get the chance to face such a thing, be grateful. Remember, sometimes what you throw in the garbage is something that someone wishes ever to have.” – ElZee, Quora   Profits from free accurate cryptos signals: https://www.predictmag.com/    
    • The good thing i had noticed so far is that the traderpot value is also on the rise..
    • yup its a gradual rollout the right way in my opinion, its really good and its exciting for the sto in 2027
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.