The Golden Rules of Technical Analysis (Part 3) "Technical Analysis is both Science and Arts" -

The Golden Rules of Technical Analysis (Part 3) “Technical Analysis is both Science and Arts”

Whether trading in the real market or in the trading simulator, understanding technical analysis is the key to getting closer to success. While technical analysis involves quantitative data, such as various numerical indicators, the truth is that technical analysis encompasses both the arts and science with these four factors.

Each trader has a different approach
Even though traders may use the same analytical tools and study the same universally accepted technical analysis disciplines, each trader has a different trading approach. Just like apprentices with their masters, each person’s individuality is unique. Some can tolerate high risks, while others prefer lower risks. Different professions and lifestyles lead to different trading strategies. Therefore, technical analysis becomes an art in itself, as each individual must discover their own path.

There are a variety of analysis tools
Tools for technical analysis come in various forms. For example, indicators utilize price and statistical data for analysis, while price patterns analyze price behavior. These two widely-known tools already have their own differences. It is the trader’s responsibility to study a diverse range of tools and find the ones that align with their trading style. This diversity makes technical analysis an art of finding what works best for oneself rather than relying on rigid patterns.

Markets are constantly changing
Even with knowledge of various technical analysis tools, it is difficult to succeed in trading if one does not know how to apply them to the ever-changing market conditions. The saying goes that market conditions change as quickly as human emotions. Tools or strategies that have worked in the past do not guarantee constant success. Traders who survive in the market must continuously adapt to market conditions. There is no one-size-fits-all formula for success.

Technical analysis is about predicting the future
The primary purpose of technical analysis is to forecast or predict future events using historical and current data as decision-making factors. Therefore, the prices that occur often reflect events or impacts on future prices. It is a challenge for traders to anticipate future price movements to make decisions on current buying and selling.

These four factors show that technical analysis requires both the use of quantitative data for analysis (science) and the expertise to modify and adapt knowledge under one’s own personality and changing market conditions (arts).

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