Every trader starts by trying to make sense of charts, indicators, and market news. However, some ideas tend to get misunderstood along the way. Maybe it’s believing that one pattern predicts everything, or assuming that every news release instantly moves the market.
The truth is, both technical and fundamental analysis take time and experience to really grasp.
One thing often people misunderstand is that someone else’s technique doesn’t work.
I couldn’t find his name, but another trader here said he trades very volatile news. People told him not to do it, but he pursued it, and he profited.
Do what works for you, and forget everyone else.
There are pros and cons to fundamental and technical.
Actually, this is about just me. I had to learn a difficult lesson about TA:
The market doesn’t care about any lines that you draw.
You can draw as many lines as you want, and you can calculate as much as you want. The market is gonna do what it does. And you can’t get mad if the market doesn’t respect your drawings.
The market revolves round “simple economics”; get the basics and stop trying to make sense of nothing.
From what I have read here over the years, it seems to me that the biggest error many make is to endow technical analysis elements (whether indicators or PA) with some kind of magical attribute that actually affects the market. For example, endowing moving averages with some kind of support/resistance quality. In fact, all an MA does is show the general direction (or lack of) that price has generated historically over a given time.
Admittedly, TA elements can appear to affect market price in the near term if it is a commonly viewed element amongst a large number of market participants.
The value in TA and FA elements is in using them to add structure to a price chart and thereby highlighting what the market as a whole is currently doing. This is still historical in nature but by applying the same analysis on multiple timeframes it is possible to extrapolate in which direction the market most likely will be moving next - and how far, depending on what trading style one is using.
Direction is one thing, managing a position (entry/exit/risk) is another.
These trade management elements are 100% within our own control, but direction is not and is purely a probability analysis.
TA and FA help us to clarify what the market is doing now and what it might do next - they do not determine what the market will do next…
Yes - 100%
Some real beginners with almost no experience expect adding extra indicators as entry filters to improve their results.
It rarely will.
When you add other indicators as extra entry filters to try to confirm the signals of some indicator(s) already used, you’re really doing two different things . . .
You’re reducing the number of trading opportunities that the system produces, even if you’re sometimes also increasing their win-rate, which you’re often not. But even successfully increasing the win-rate isn’t often helpful anyway, because the highest win-rate systems are usually neither the most profitable nor the safest
You’re increasing the curve-fitting, which naturally reduces the predictive value of the system. When you backtest, to determine which indicator-combination works best for the sample data over which you’re testing, the greater the number of indicators you’ve used, the higher is the chance that your findings will be curve-fitted to that specific sample and therefore the lower is the chance that it will continue to be profitable in future
Both these things are much more likely to have bad results than good ones.
Lol, we should get all this stuff together and open an online fine-art-prints gallery, or something. There might be customers! 
Being an ex-art teacher, from many years ago, I have often had the same thoughts. 
I agree.
I think that arises at least partly because people mistakenly expect technical analysis to be predictive rather than probabilistic.
Great chart @Johnny1974 . Does it work on all timeframes? 
Oh yes - take away the time axis and the price axis and you will see it works on all timeframes 
Great! 
I did that and the price is still $26.88 - that’s the best result I’ve ever had! - which, apparently, puts us in the top 10% of all retail traders! 
I could never; I would go crazy if i had this guy’s setup, but it works for him. that’s a lot of data to take in.
Thinking adding on more and more stuff to your trading or charts will improve your results.
Of course we never stop learning but sometimes the more you learn, the less you know, as you will overcomplicate things. One starts with just learning higher highs, higher lows and vice versa. Then add indicators. then patterns, then fundamentals. then more indicators. Then 5 peoples judgement of the market from youtube.
It becomes too much. Find one or two things and keep it simple.
Some traders love a lot of stuff on their charts, nothing wrong with that, but as a beginner learn the basics.
I thought trading is so complicated so if I kept it too simple then it’s wrong as trading is complicated and hard. The improvement came when I scaled it all down. Now I’m working towards keeping it simple every day and just trading what I see. Hard to this day but that is my “keep learning every day”
I’m with you. My goal with trading is MORE freedom and LESS baggage.
His method does the opposite for me. Ideally, I need just one laptop.
Maybe I’m wrong, but I think he got carried away with his strategy. This is what happens when you start trading, you have more control over your life, and you don’t know what to do with the new freedom. So, instead of pursuing a hobby, he simply chose more work.
Totally agree with you.
I’ve seen this many, many times, among people leaving pro trading environments (typically for retirement/semi-retirement but sometimes for other reasons instead) doing exactly this! It’s really pretty common!
That man is determined to trade every financial market, to analyze every instrument, and to catch every trade in each market.
