Why technical analysis is not reliable

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Why technical analysis is not reliable

technical analysis is a useful tool for traders, but we have to consider it’s limitations. Technical analysis is basically based on assumption about the past market statistics and data, without putting into consideration other external factors . So traders should not 100 percent rely on technical analysis, they should use it together with other methods of analysis.
Some of its limitations includes
1.it is based on assumptions about past market trends, gotten from the past market price and  volume data
2.it is a backward tool subject to interpretation from different traders.
3.Technical analysis will not provide the full details of the market,  that is putting economic and global events into consideration,
so traders should put all these factors into consideration before making an investment decisions using technical analysis.

Lakshitha Kumara Answered question July 4, 2024
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Technical Analysis is just of the many analysis use by traders to analysis the market. Trades make use of fundamental analysis to evaluate their confluence on a particular market which even with the combination of both the market might still not go as planned because all are still speculations which are definitely not accurate. But this doesn’t defeats the importance of technical analysis because it is the only analysis readily available to any trader at every moment of time. The fundamentals and otters are periodic analysis.

Lakshitha Kumara Answered question July 4, 2024
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