Wrong Myth Technical Analysis may make wrong decision in trading. Today, many traders and investors denounce technical analysis as a superficial study of patterns and charts without showing concrete and profitable results in an investment. Although not all traders denounce the use of technical analysis, its use is still being debated. Of course, these two different opinions cause misunderstandings in the investment world about technical analysis and their use.
The misunderstanding about technical analysis is actually based on the training and education received by traders and investors. For example, a trader has been trained by only using fundamental analysis, it is likely he also will not believe the use of technical analysis which in fact can also produce beneficial results. Well, in this article we will present information about the myth of technical analysis that has been undeniable so far.
1. Technical analysis is only for short-term trading
This myth is a common myth in the investment world that technical analysis is only suitable for short-term and computer-driven trading as well as daily trading and high-frequency trading. However, this myth is not always true because it is summarized from several sources, technical analysis has also been used by investors and long-term traders and provides favorable results on weekly or monthly charts.
2. Technical analysis is only used by a handful of traders
It is believed that since a few years ago, technical analysis was only used by traders who are personal in nature. However, in reality investment banks also use technical analysis. Even the investment bank is known to have a special trader team that still uses technical analysis. High frequency trading on the stock exchange also depends very much on this technical analysis concept.
3. Technical analysis has a low success rate
Successful traders have decades of experience refuted this myth. This statement was known when the interviewer interviewed several large traders who had successfully run their businesses and made huge profits using technical analysis and patterns.
4. Quick and easy technical analysis
On the Internet today is filled with various websites that offer technical analysis courses that will promise success in trading. Although a lot of people who jumped into the world of trading who started trading based on simple technical indicators. However, to achieve success in sustainable trading for the long term, trading requires practice, deep learning, good money management and high discipline. To do this requires knowledge, time and special attention so that technical analysis cannot be done instantly.
5. Technical analysis software can help traders make money easily
In the virtual world there are many that offer trading software ads that are sold at prices of up to tens of millions. Most of the sellers will claim that the software they sell is capable of conducting analysis for your trading business. For traders who are still beginners and do not have the experience of course feel confused between buying software offered that promises to profit for trading or not. For those of you who are beginners, you do not need to be confused anymore now because although many advertised software can provide insight as well as patterns in technical analysis, but the software does not always guarantee profit for you. It also depends on the thinking of traders who want to believe it or not.
6. Technical indicators can be applied in all markets
Indicator is a tool used by traders and statisticians to take statistical and subjective actions in trading. This indicator refers to things like volatility, momentum, cash flow and trends to give a lot of insight into potential price movements. In technical analysis there are thousands of indicators available and the myth can be applied in all markets both the forex market and the stock market. However, every technical indicator apparently cannot be applied to all markets. Each indicator has its own specific characteristics and has differences, as well as its application. The fact is that each indicator has different equity, futures, options, commodities and bonds. In this case you should not make a mistake by applying technical indicators that are not appropriate for a group of assets.
7. Technical analysis can provide very accurate price predictions
Many beginner traders believe that technical analysis can predict 100% accuracy. However, it turns out that the assumption is wrong because traders actually have to realize that technical analysis only provides a range of predictions, not exact numbers.
8. The level of victory in technical analysis should be higher
The last myth about technical analysis is that the winning rate using technical analysis should be higher. However, this is not always true because this is also influenced by the right trading arrangements for high probability. Profitability is a combination of win-rate and reward.
Those are 8 myths about technical analysis that are not always true. Well, what about you do you still believe in these myths?
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You are certainly no stranger to the name Forex which involves foreign exchange or foreign exchange in it. The Forex market is a giant source of finance that is extraordinary in the investment world. For those of you who want to be involved in the world of forex trading, of course you must understand the concepts in it. In this article, you will discuss the 8 basic concepts that must be understood by all forex investors and traders as follows.
For those of you who are traders in the forex market there must be 8 strong economic holders that will determine the opportunities undervalued or overvalued in trading.
In the world of investment, 8 countries with strong economic strength in the forex market are the United States, Europe, Japan, the United Kingdom, Canada, Switzerland, Australia and New Zealand. Well, these 8 countries have the largest and most sophisticated financial markets in the world. For traders, focus on these 8 countries and you will be able to take advantage in trading.