"With TA, we only have 3 variables - price, volume and time"...

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debono

22,937 Posts.

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07/04/24

19:45

Post #: 73229129
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Originally posted by float^ ↑

I take your point. Generally, technical analysis (whether Wyckoff or other) takes the view that everything is reflected in the charts. Everything - not just insto accumulation & distribution, but all economic data, all news releases. The assumption is that the banks/instos know all the available FA, and they know all the economic data ahead of time. Having watched price action of small caps for some time, I'd say it's a reasonable assumption! Even if just one of them knows, they will begin to move the price and other banks/instos will sniff it out and follow suit. So not everyone believes it, but I do. My issue with FA is that many ASX companies appear to have great fundamentals but fail to capture the interest of banks - what then?

With TA, we only have 3 variables - price, volume and time. If the banks want to begin accumulation or distribution, it's a slow process and we can see their footprints reflected in these variables. In the days of Wyckoff, it would have been much more obvious. Nowadays they use sophisticated methods to hide their interest, but they can't hide it completely.

In my view, the only variable that might lie outside of TA is natural disasters or events like covid. But even then, we can see where the money is flowing and follow suit.

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"With TA, we only have 3 variables - price, volume and time"
That is the basis but it is like saying the only variable in fundamental analysis is information. The technical analysis starts with the historic information and how often and when history repeats. It is the analysis as to where the skill lays. A house starts with a foundation but with the foundation alone you have no idea how big the house will be. How many same foundations have been layed and what similarities in structure have they produced?
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