Chart, page-20336

I get the probability stuff and the human element associated with repeated patterns etc ....
But I’d also like to know what happens to those probabilities when the broader FA drivers come into play....
For example, let’s say that a bullish flag, in general, overall, on average, has a 70% chance of upside breakout (or whatever the number is), then what happens when fundamental drivers for that stock/sector are negative/down? Does that 70% become 50%? In which case flip a coin or survey some chimps. When fundamental drivers are positive, does the 70% chance of upside continuation of that flag become 90%?

This, imo, is very interesting.
Surely anyone basing their trading on TA should recognise that the probabilities will (I strongly suspect) depend significantly on external (non-TA) factors, and therefore the stats get all skewed from their “averages”, and therefore the averages are arguably irrelevant unless the market is in an “average” condition..?

We sometimes see nice big runs continue despite the so-called relevant indicators all indicating “overbought” ...?!
In a neutral or negative market condition, “overbought” indicators might highlight imminent reversal.... but if a sector is getting hot and fundamentals are rapidly improving, maybe those indicators become relatively meaningless, at least for a while...? It appears that we see this time and time again.

Anyway, just some thoughts... and I do suspect that we’ll see a lot of this (“overbought” indicators remaining that way for extended periods) over the coming years in this sector..
Perhaps an “adjustment factor” of some sort would be useful to account for the “tide”..?


Imo
DYOR