08-10-2014, 10:15 AM
Agree, I've never seen technical analysis offered up with any kind of explanation of the reasons behind the supposed named patterns. The best explanation I have heard is that it's self-fulfilling; i.e., if the market sees a double top, the stock will go down because the market sees a double top, or if the market sees an ascending triangle, it will break out because that's a bullish signal and traders will buy.
On the other hand, the few concepts I do know (resistance, support, channels, etc) live in my head, and they do make a difference in when I decide to buy a stock. I picked up some ESV the other day around 49 because it's at major support, it's cheap, and it just looks like easy money.
On the other hand, the few concepts I do know (resistance, support, channels, etc) live in my head, and they do make a difference in when I decide to buy a stock. I picked up some ESV the other day around 49 because it's at major support, it's cheap, and it just looks like easy money.