Whether or not you believe in TA, doesn't the fact that most trading is now done by computers deal it a serious (possibly fatal) blow?
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All the Analysis I do is technical, so I guess I'll wait for someone else to answer this properly. My own answer is -> TA is only as good as the Strat/Quant/Programmer who writes the algorithms to crunch the data. Quite often I've seen the guys on the desk send back the analyses as not quite being "right".
Apart from that, there are always freak situations that require a human eye. TA will definitely eliminate a lot of "vanilla" analysis, but there will always be room for the human edge.... at least for a while.
PS - I didn't quite get the reference to HFT in this post.
Sorry if I wasn't clear, what I meant was that since TA assumes that price action is caused by human behavior, which generally fits into patterns that have a tendency to repeat over and over, but now its mostly HFT machines doing the trading, those technicals shouldn't really exist anymore.
HFT traders hold the position for a very short period of time. The technical analysis is conducted on price actions over a time frame that's mainly influenced by human traders.
I’m afraid I don’t follow. I don’t see why it matters for the purposes of TA how long the position is held. And isn’t a longer time frame simply a combination of a bunch of shorter time frames?
from what Ive read , high frequency trading generally isn't about placing directional bets where you are speculating on prices, its more about arbing the tiny spreads and scalping pennies off of trades. so if you are using some technical indicators to speculate on whether the price of security will be falling or rising within a specific time frame, I don't believe that the existence of HFT renders the indicator ineffective. For example, if your technical indicators tell you that XYZ is oversold, then thats a sign that investors are selling too much and it might be time to go long. HFT doesnt change that fact that investors are generally bearish on XYZ at that moment.
Ah I understand now thanks guys
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