The thing that makes technical analysis work is that other people are also using it. If a bunch of people/machines that make trade decisions see that a stock has some resistance at 115, because it's bounced off it several times before, they are more likely to anticipate that happening again and act accordingly. Since everyone does that, the predicted action happens. Then eventually there are other things that happen that drive it past that point, and people move on to the next set of signals.
If enough people believe it's true, it becomes true.
I don't use it currently, but I dabbled with it when I was younger (not as the only thing I looked at).
Comments
The thing that makes technical analysis work is that other people are also using it. If a bunch of people/machines that make trade decisions see that a stock has some resistance at 115, because it's bounced off it several times before, they are more likely to anticipate that happening again and act accordingly. Since everyone does that, the predicted action happens. Then eventually there are other things that happen that drive it past that point, and people move on to the next set of signals.
If enough people believe it's true, it becomes true.
I don't use it currently, but I dabbled with it when I was younger (not as the only thing I looked at).