Does technical analysis work in modern markets?

you are into option buying bro
and option buying requires maximum technical …keep psycology and other factors aside
isnt it

Yes, thats what i said - take random trades. If you keep 1:1 then you will get close to 50% win rate but lower due to friction.

And win rate will balance out any change you make in R:R more or less. So increase R:R and your win rate will reduce in proportion more or less.

I have tested this. I also have tested trades with edge and how win rate reduces if we keep larger targets etc. And usually we can have a sweet spot way of doing things when trades have edge so its worthwhile to test.

If you take not random trades with some logic behind it - then it depends on whether that concept has an edge. Even a negative edge will be great as you can do reverse. But most of the time there is no edge and you get 50% with 1:1 etc

Anyway, just saying what i have seen. Markets are efficient most of the time. Also most TA stuff is probably garbage and superstition. I have no interest in taking CMT, which is probably at best a networking tool.

Only way to know is to test it over say 10 year data with slippage and execution costs factored in.

1 Like

Great. As I said I never tried. Just a thought. Considering your experience I will go by what you say. :+1:

35% win rate in options trading seems pretty unusual. Or are you into just equity alone?

yeah, I don’t trade options yet, have not studied much there. But anyway, same system i can run with 60% win rate and its much worse.

Yes agree.

Any style of profitable trading would require discipline. TA makes it easy to follow something by providing a math based edge.

Note that option buying is not a strategy in itself. You need to have an analysis system that will give you the direction of the underlying. It is for this direction sensing I use TA.