Technical Analysis =< Emotional Analysis?
I'll start with acknowledging my ignorance and profess I'm quite new to trading and (sophisticated) investment in general. I am considering learning python and quant trading. Crypto is intriguing to me in this context.
My question has a few parts.
First, my understanding (based on what I have read) is that Technical Analysis, at the mean, doesn't work. I accept the fundamental idea here: that forecasting based off random patterns is fallacious. Intuitively, to me at least, this makes sense... But so does buy low, sell high.
Furthermore, markets are infused with human emotion. On "China Black Monday" (last August), and more recently with "Brexit", huge selloffs provided capitalization opportunities for savvy traders/investors. I had a friend who shorted the VIX on "China Black Monday" and made a great return. It seems "objective" analysis of human emotion is a valid way to trade/invest... Am I missing something important here?
Technical Analysis applied to the graphs would have yielded the same result, no?
Is there a third kind of "Analysis" (i.e. Emotional Analysis)? If not, how does the analysis of aggregated human emotion fit into TA (or FA)?
Nassim Taleb's approach to trading is intriguing (I don't agree with everything he says). He lives for these big market movements, his "Black Swans". As I understand it, he continuously shorts the market and waits for big drops (because the big drops are always much bigger than the big jumps). This method, it seems, surmounts the problem of randomness (I'm very curious about his algorithms).