I have one question. How can technical analysis work on market index, say Nifty. Because it is combination of 50 stocks and one doesn’t trade with Nifty itself.
For example if there is support / resistance at certain level. How does that work ? How can certain level work as support / resistance. Because all the 50 stocks move in their own way. How can all of them together have certain Nifty level as support or resistance ?
Thanks a lot for any answers - Regards
It can work anywhere because it is placebo.
Science has limited applicability. Pseudoscience has no limits other than your imagination.
Good to be skeptical.
Whether SR works, i don’t know. I don’t use them. Another issue in futures (which is what we trade) is that every expiry we need to adjust and so whats SR now ?
The way to answer this question is to test things yourself. Then you can see what works and what doesn’t instead of depending on what others think. Make sure to use many years of data.
Also, while its fine to think about reasons, we also don’t have to be bound by it. If something works well regularly, then use it even if you don’t know why it works.