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birb_cromble  2d ago (text post)   456 thread views

Weekly Finance Thread - 2026-07-25

A weekly thread to discuss financial matters - from personal all the way up to global.

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Have any of you started learning how to interpret charts? (Alternatively, how many of you have been studying charts for a long time already?)

I've advised people here to obtain basic technical analysis knowledge a few times by now, but I suspect that piece of advice has been ignored.

Depends upon which type of Efficient Market hypothesis you believe in:

  1. If you believe in Weak form EMH (all past information is there in the current price), then Technical Analysis is useless.
  2. If you believe in Semi-Strong EMH (all past and current public information is in the current price), then Fundamental Analysis is useless. But insider information (private information) is helpful in making profits, although it is illegal.
  3. If you believe in Strong form EMH (all past, current public and private information is there in the current price), then all analysis is useless.

If you are a practitioner, then you should be able to point out where it can really give an edge to a retail investor/trader (or please link to where you have already done so).

I think technical analysis is the lay interpretation of momentum, which is a real factor that drives returns.

As performed by retail traders, an old saying is that technical analysis is astrology for men.

I don’t think it’s limited to momentum. But technical analysis and quant researching are probably essentially the same thing. One uses computers and the other just prints all the data on paper and looks at it.

No, it does not depend on EMH or any belief in any form of it. No one cares about that model.

Practitioner? In the sense that I realize that operating without charts is like driving cross-country without availing myself of any maps. Or like a doctor not using EEGs or any imaging techniques etc.

Do point how it will help in which area? Where do you drive cross-country in the world of investing/trading?

Note that I do think technical analysis is useful, but that analogy is not really convincing. Because maps are useful because they directly chart observed land. In economic parlance, for a practitioner of fundamental analysis, charts are useful so far as they are representations of fundamentals. For the same people, charts and insights from technical analysis people are about as useful for navigation as maps from people who've never surveyed the land they're mapping and are just going by:

  • There's a lake there? Sure, I can draw that, I've seen what lakes look like, they've got lines going like this. What do you mean by "have you ever seen a lake in real life?" how is that relevant? We're making maps here, not going on vacation!

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