[WalterBright]

When I'd watch the financial news on TV, they would always bring on the "technical analyst", show a graph of the stock price, and then hand-draw some lines on it, and then spew out various technical terms for it guaranteed to impress.

Me, I always regarded technical analysis as drawing pictures in clouds.

If any of those analysts were worth spit, they'd be working for a hedge fund, not the network.

[karmakaze]

> drawing pictures in clouds.

Well phrased and it's how the stock market works, not only by technical analysts but everyone else playing: make a story in your head, place your bets, majority rules.

Some even believe that's how reality works in general. Sometimes belief or need could be a factor[0].

[0] https://www.guinnessworldrecords.com/news/2012/9/norwegian-f...

[WalterBright]

On a more long term basis, the stock market reflects the business reality. But in the short term, it's chaos.

[karmakaze]

The former is a belief. It always reflects the imagined realities of those investing--we assume that business reality catches up with them, and it mostly does but not always within a predictable time frame.

[WalterBright]

> The former is a belief

It's based on the Law of Supply & Demand, which is always in play.

[gloosx]

Always in play for goods and services, but this is a crypto currency – it's supply is mathematically limited, and it's value is fully market-dependent – determined only by players on the market.

[wqaatwt]

A huge short term influx of free capital can shape that longterm business reality. Of course both in positive and negative ways

[jhghikvhu]

There is something to technical analysis. But you do need to approach it rationally rather than by performing magical rituals.

The markets are made of a finite and sometimes very small number of participants that may have their own reasons for buying and selling unrelated to company performance. Figuring out what they will do is the basis.

Maybe Bob is looking to sell a lot to free up cash for private jet. Maybe Alice buys every month the same day like clockwork as she gets her paycheck. Maybe Charlie thinks the stock can't go about $50 and will take profits at $49. Maybe Debbie regrets not buying and is likely to fomo buy soon.

Probably can't figure this out one by one, but can in aggregate.

[zamalek]

At the end of the day the stock market is a consensus model with a spectrum between two, sometimes contradictory, metrics (sentiment and analytical). If your conclusions about a stock agree with the market then you profit. If you can guess what the market will decide before it has decided, then you profit more.

All those lines do actually mean something, so long as the market is in agreement as how to draw them.

FWIW these bots aren't doing the lines stuff, they are purely sentiment traders.