Following is a portion of an extended quote provided by Michael Covel, author of Trend Following and The Complete Turtle Trader, in which he talks about two different types of technical analysis:
“Technical traders believe that a careful analysis of daily price action is an effective means of trading for profit. Now, here is where an understanding of technical analysis becomes complicated. There are essentially two forms of technical analysis. One form is based on an ability to ‘read’ charts and use ‘indicators’ to predict market direction. This is the view of technical analysis held by most people who know of technical analysis that it is some form of mysterious chart reading technique, such as astrology." To read more of Michael Covel's quote on technical analysis, please click here.
James Chen, CTA, CMT