As I was reading a few articles dealing with Forex, I came about an interesting article dealing with Technical Analysis and Forex. According to the article, it states the two have no relation to each other. It then gives examples about how many factors that actually drive the market, yet don’t give a darn about the technicals and simply trade.
Being educated as I am, I do understand that some technicals, such as Moving Averages and perhaps Stochastics serve their purpose as alerting you which way the market is generally heading, but there are some that don’t make sense. The best examples are Pivot Points and Fibo.
Most people swear by such miracles, yet there is something that does make me wonder if they truly matter. Banks (Being some of the main money movers) don’t ussually trade under the assumption that technicals work, but whether they are in need of a certain currency or other factors. Since individuals don’t seem to truly control the rate, what is the point of such systems? The banks don’t care, the economy doesn’t care and the Fed doesn’t care.
So I do wonder, why use it then? While some do serve purpose as FOrex does move in trends, what is the point of others? If people and their emotions only make up a fraction compared to the cold harded banks why bother?