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2 Weaknesses of technical analysis

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Nendi71

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1. Technical analysis only displays past data.
The weakness of technical analysis lies in the fact that the chart only displays records of price changes, whether in the form of candlesticks, bars or line charts. Yup, the keywords are "notes" or record price changes. In other words, the chart only presents the range of price movements from the past to the current time.
The implication, as sophisticated or accurate as any technical analysis, really cannot "predict" where prices will move next. Even though with the help of RSI class leading indicators and Stochastic Oscillators, the risk of fake signals (fake signals) still has the potential to harm your account.

2. Relatively subjective.

The problem with the weakness of the second technical analysis is when traders try to find the best entry points with different strategies. As a result, between one trader and another trader will surely end with the opening of a different position. As a result, the market will not necessarily move as expected, even though the trading signal looks very clear to you.


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#1 - February 03, 2019, 10:02:53 PM

Rudi

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in my opinion, every analysis would be technical analysis or fundamentals must have their respective weaknesses, we only have a trader who must be able to control the analysis to become a stock of knowledge in this trading world, because on the basis of all good techniques and of course behind it also has weaknesses, which we must know in order to better understand how to use it
#2 - February 05, 2019, 02:12:04 PM

Tahajud

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For this reason, we need the name money management. because any analysis must be only probable, and therefore there will certainly be potential losses. so this is where it's important to have a good and healthy management. because with good management we can manage how much our losses are so that we can still get accumulated profits at the end
#3 - February 05, 2019, 11:17:55 PM

ariezz

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Quote from: Nendi71 on February 03, 2019, 10:02:53 PM
1. Technical analysis only displays past data.
The weakness of technical analysis lies in the fact that the chart only displays records of price changes, whether in the form of candlesticks, bars or line charts. Yup, the keywords are "notes" or record price changes. In other words, the chart only presents the range of price movements from the past to the current time.
The implication, as sophisticated or accurate as any technical analysis, really cannot "predict" where prices will move next. Even though with the help of RSI class leading indicators and Stochastic Oscillators, the risk of fake signals (fake signals) still has the potential to harm your account.

2. Relatively subjective.

The problem with the weakness of the second technical analysis is when traders try to find the best entry points with different strategies. As a result, between one trader and another trader will surely end with the opening of a different position. As a result, the market will not necessarily move as expected, even though the trading signal looks very clear to you.
It is not only technical that has disadvantages, but fundamental analysis also has weaknesses, if there is no weakness in the type of analysis, surely no trader will lose.

Regarding technical knowledge, in my opinion, there are many weaknesses considering that technical indicators themselves are repaint and only as a tool, so the accuracy of a technical analysis depends on the strategy possessed by the trader.
#4 - February 07, 2019, 10:45:43 AM

Azis Muslim

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Here I want to give some explanations about disadvantages of technical analysis according to your post. First point is completely wrong in many ways because technical analysis help us traders to look at old movement as the habit of market itself is, if you ever heard this that history repeats itself. If you notice this then you should've known market is moving to the same levels all the time by repeating its previous one week low/high, one month low/high/ one year low/high, etc.

Second point explains how your understanding about technical analysis is still lacking because in this business, you don't need to use a lot of strategies at once. Simply use a strategy or 2 as our minimum requirement to trade because trading doesn't has to be that complicated at all. Market movements are easily recognize with our strategy when we keep it simple.
#5 - February 07, 2019, 02:34:34 PM

javazz

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technical analysis has several disadvantages such as sring false and also inflexible.
#6 - October 11, 2019, 08:17:13 AM

DewaFx

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the weaknesses of technical analysis in my opinion can be minimized by using the right strategy because even though the fundamentals also have weaknesses if not used properly.
#7 - February 09, 2020, 03:43:30 PM

SamuraiFx

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Quote from: DewaFx on February 09, 2020, 03:43:30 PM
the weaknesses of technical analysis in my opinion can be minimized by using the right strategy because even though the fundamentals also have weaknesses if not used properly.
every analysis must have technical or fundamental weaknesses, yes that's the analysis in my opinion depends on the trader's habits in analyzing his trade
#8 - February 09, 2020, 04:18:50 PM

Antonio

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Technical analysis has drawbacks, but not only technical, fundamentals are the same, if you have analytical skills with both will be very useful.
#9 - February 10, 2020, 04:19:03 AM

carlien

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in my opinion the weakness of technical analysis is not only the 2 things you mentioned but there are some and other analyzes also have weaknesses such as fundamentals, market sentiment or candlesticks.
#10 - February 10, 2020, 06:19:36 AM

havis

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I think the weakness of technical analysis lies in the indicators used and also how he understands the tools he uses to do the analysis.
#11 - February 10, 2020, 07:11:13 AM

Arjun Setya Raharja

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Technical analysis is usually made using a trading system with all technical indicators and technical indicators indeed have many weaknesses including those regarding the validity of signals that often repaint.
#12 - February 10, 2020, 05:14:54 PM

Acewyr

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the weakness in the indicator usually lies in the false signal and also the complexity of the indicator so there are indeed some weaknesses of technical analysis compared to other analyzes, but keep in mind that any analysis has weaknesses.
#13 - February 10, 2020, 11:26:10 PM

Tri Selasih

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technical analysis is an analysis with indicators and certainly will have weaknesses, fundamentals and market sentiment analysis which is more accurate than technical also still has weaknesses.
#14 - February 11, 2020, 09:16:29 AM

Trully Amary

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it is not surprising that technical indeed has many shortcomings because indeed technical is a repaint indicator and does not fix in describing the actual price movements.
#15 - February 16, 2020, 10:00:45 AM
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