Do all the things like ++ or -- rants, post your own rants, comment on others' rants and build your customized dev avatarSign Up
From the creators of devRant, Pipeless lets you power real-time personalized recommendations and activity feeds using a simple APILearn More
>Was reading an article about how markets are probably going to crash next year based on some technical indicators
Welcome to the last 10 years?
nanl243243dSorry, I can't help with your original question, but I'm interested in 2021 crash article. Could you share more about it?
Root7279343dTechnical analysis doesn’t make much sense, but it totally does work. I have no idea why all markets seem to follow the same rules and patterns, nor why those rules and patterns make no bloody sense. But it’s true, and they totally do.
I’d recommend reading up on Gann as a starting place. (As in the person who came up with the Gann Fan, among others.)
Also, basically every article you find online on what the market will do is going to be wrong. Why? People don’t know what they’re doing, and some do but intentionally publish incorrect information because they can profit off people who follow it. This is especially true of exchanges and those claiming to teach trading strategies. Notable example: the “technical analysis” needle on TradingView, which ranges from “strong sell” to “strong buy” is almost always exactly backwards. It takes a lot of effort to be wrong more than 95% of the time. Is it any wonder why the overwhelming majority of traders lose money? The entire thing is designed for them to do just that. Almost all of it is “fake news” because someone profits off of you losing money on trades. Doesn’t matter if you’re paying them to teach you. God, fucking con artists can get bent.
Anyway. Another great place to start is Anton Kriel. Imagine a Ramsay of trading; that’s him. Tells it like it is, doesn’t put up with bullshit, calls everyone else out on their bullshit, and explains how all the bullshit works, and what to do about it. He founded a trading institute and sells bloody expensive classes that actually have valid, useful information. One of the lessons in ... I forget which risk management class changed my life in trading, and we’ve made significantly more money since. (Box A vs Box B)
But seriously, apart from him, the only place you are likely to find factual information is in the boring as hell books on technical analysis. The older and more boring the book, the better.
NEMESISprj38243dI was actually reading into the matter last year and I found out that a lot of the technical indicators make a lot of sense if you realize that the stock market is one big psychological game.
The indicators probably work because almost everyone else uses them as well. The market is one big positive feedback loop: you see people are buying? You probably buy too. You see a lot of stocks being sold? You're gonna sell as well to cut losses/make quick profit before you're too late.
And yeah, risk management is the way to prevent huge losses. Make sure to spread and only about 5% of your budget into one stock or something like that I guess
vane910943dIt’s only working in a short term investments like HFT / day trading or something.
There are like 2 I know from forex that were popular among analysts. Those are Ichimoku, triangle / harmonic pattern.
In a long term it’s only a helper that shouldn’t impact trading to much.
Fast-Nop3207843dThe biggest trick is not working with your own money, but other people's, and drawing a commission.