Technical Analysis: Why it Works and its Limitations

Technical Analysis: Why it Works and its Limitations. Francis Hunt, a technical analysis trader and coach comments. If you've found this video useful, please click the like button and share it with your friends and remember to SUBSCRIBE to remain up-to-date!

Do you really believe that technical analysis can help traders? In what ways? How can a chart help forecast future prices if they are based on the past? Do you base your trading solely on technical or do you also use fundamental analysis? Can technical analysis by itself be the mainstay of an investment strategy? We know that in practice what happens in reality is that one piece of real news can blow up months of small technical gains. Please comment.

Technical analysis works for me but I've selected the elements that work for me and there are limitations. There are a number of concepts that I feel don't work and which I avoid. Traders are taught indicators and moving averages; many of which are lagging the price action. I think there is too much fascination on indicators and too many traders get caught up trying to seek price tops or bottoms. I think price action is often de-emphasised. I do value volume and things like bollinger bands. I also use chart patterns as these capture people's footprints and DNA of a crowd's response to certain impulses.

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