Do Banks & Hedge Funds Use Technical Analysis?

I'm curious if banks and hedge funds use technical analysis whether it be for trading or investment decisions. Are traders at banks using TA? If so, I'm curious as to why the CMT designation isn't more popular since it is all about TA

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Comments (7)

  • Intern in Other
Aug 13, 2020 - 4:02pm

The fund I'm at has a trader that specializes in it, but not sure how much weight they put on it

  • Intern in IB - Gen
Aug 13, 2020 - 4:03pm

Hasn't technical analysis been proven to not work? A Random Walk Down Wall Street says so, but maybe someone else has contradicting evidence

Aug 13, 2020 - 4:08pm

Some traders use TA but it's probably more product dependent. TA is a scam in my view, and given the amount of data you have at a bank regarding flows of capital and research etc Im not sure why youd use TA like some retail FX day trader.
Particularly hilarious when I see people using TA to explain past moves and predict future moves when they clearly have no idea what they are talking about.

Aug 13, 2020 - 6:17pm

Technical Analysis is a very broad category. There are certain chart patterns that work well for predictive pattern recognition, on a statistical basis. If coin flipping gets you 50% odd of being right over 100 trades...Technical Analysis, performed by a user with some skill and experience, can maybe get you to 60-70%. However, "technical analysis" is a very broad term....there are some patterns that work very well for certain markets...and other technical patterns that don't work at all...and it takes experience to know which is that mean it doesn't "work"

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  • Prospect in Other
Aug 14, 2020 - 11:18am

Could you talk about some ways that you use it to trade? Which techniques do you find useful? Also what other techniques do you use to trade outside of TA?

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Aug 14, 2020 - 2:53pm
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