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Cause of Technical analysis


I recently came across this quote: “One of the weaknesses of our society is that history is still news to most people.” This pretty much answers why Technical analysis work.

Much of the Technical analysis is based on how to ensure the repeated patterns are put to work and create an unfair advantage for traders. As long as people tend to forget, something which politicians of all kind have known and exploited well for centuries, the mistakes will be repeated. Unfortunately, even the people who have gone through the mistake end up making the same mistake.

This reptition mostly enabled by forgetfulness and driven by fear, greed and herd behavior leads to the best known patterns in Technical analysis.
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