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Using Degen Language to Explain the Importance and Usefulness of ‘TA’ AKA Technical Analysis

Apologies if you have the attention span of a gold fish (I sure as hell do) but I’ll try to keep this short and to the point. I’m on 30mg of Adderall so the sooner I start the better. Alright here we go.

I see a lot of hate towards TA around here. I understand why a lot of you degens are skeptical, but I’d like to put TA into a perspective that people like us monke can understand. I know, I know, TA is like the boomer version of Astrology, and although both Astrology teen girls and TA boomers are very similar, there is still much for us to gain if we utilize TA properly.

I won’t go into exact details on **how** you should apply TA, but I will touch upon an elementary school level of philosophy on **why** it is necessary and how it can increase your success by a large margin. (“Large margin” as in “More tenderloins” not “MARGIN CALL”. I know some of you might have PTSD and/or are illiterate)

In order to not overwhelm you, I will use the game of Poker to explain these concepts in a more digestible and relatable way. I’m assuming the stock market is either a replacement or a supplement to your casino gambling addictions, so most of you will already know the rules of Poker. If you **DO NOT** know the rules of Poker you’re honestly a giant pussy and I’d rather you not read my post at all. **OUT! OUT! OUT!**

Poker and the market have many similarities. Yes there are boomer Stonks that only go up at a snails pace and you’ll be a millionaire by the young age of 95, but again, let’s assume you’re not a pussy and you play the stock market like the casino it truly is.

In poker you get a hand from the dealer and you make due with what you got. You can fold, bet, check, and use positioning and mind games to turn any shitty hand into a winning one. The cards are luck, the actions are skill.

The market is very similar in that sense. The biggest difference (aside from the obvious ones) being that you don’t need to let some random asshole (dealer) choose a stock for you. You get to choose yourself.

A notable similarity which will also help reinforce the analogy is the reality that no matter what hand you get in Poker, no matter how high of a chance you have to win the hand, there’s always a chance of losing. You can buy Amazon today and it could tank 70% on Monday because Jeff Bezos and Bill Gates blew $300 Billion on dildo’s and male strippers one night in Vegas to celebrate their divorces. And you can lose a hand in Poker with quad Ace’s, or a straight flush.

With that being said, Amazon tanking 70% in a day is…possible… but extraordinarily unlikely. You see, the Stock market can be an easier game than poker. If you view each stock as a playing card, you will always go for the best hand. I like to imagine that if I bought an Amazon stock, it’s actually an Ace of Spades (**A**mazon = **Ace of Spades**) and let’s just say I buy Apple as well. Now I have the best starting hand in poker, (**A**pple = **Ace of Spades**) suited!

**(For the record, Amazon and Apple are only being used for the analogies sake. I do not, and probably will not ever own either of those two stocks.)**

Now that we know to associate picking stocks based on their first letters and consistency, we can finally bring attention to the other ways of ensuring we have a “**likely** to win” hand. “Likely” is very important here. Repeating what I said above, even the best hands can lose, and even the best stocks can fall. This is where TA is important. We use TA to know when to fold, double down, or check. **Buying the stock is choosing your hand, holding the stock is playing the game.**

Anybody who uses TA to predict the direction of a stock with 100% certainty is an absolute moron. Anyone who thinks NOT using TA will lead to a higher chance of a successful trade is **ALSO** a moron. We must meet in the middle.

From now on, we will view TA as a way of establishing our percent chance of winning the hand (trade). Just like how we know pocket Aces ensures an 81% chance of victory, we must use TA to find our percent chance of winning. If we use TA properly and see we have a good hand, BET (Buy more) or CHECK (hold). If our stock looks to be the equivalent of a 7-4 hand, FOLD (Sell) or BLUFF (Buy the dip).

I hope you learned something here. Obviously this is the best advice you could ever get but of course I must ensure you that this is NOT financial advice, it’s actually a Brochure for a hotel in Antarctica (Get your warm and cozy Igloo now starting at just $19.99, Canadian Eskimo Included)

What do you think?

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8 Comments

  1. But you’re coming in with the assumption that TA works. You’re saying “TA works, so you should use it you moron”

    I’d agree with you if that was the case. However, I don’t believe that TA can outperform randomness. So anyone using TA is a moron and is wasting their time. TA is just astrology for the finance world.

  2. So now that I’ve googled technical analysis, I’m going to apply it in reverse to all of the trades I’ve made to figure out if my instincts correlated with the markets inversely or if I just have shitty luck. Thanks for pointing me in this potentially maddening direction.

  3. It’s just if/then logic for trading. It doesn’t guarantee anything – nothing does – it just gives you a reason to be there in the first place. Patterns repeat themselves. Look at any chart and you will find stocks revisit certain price levels, and behave differently in certain ranges than others. Why? I lDGAF but if I’m betting on how a stock’s price will move in the future, I just think MAYBE I’ll take a look at how it’s moving right now.

    So you have a reason to be there from the chart. And a way to measure when you’re ‘wrong’ enough that you need to bail. That’s it. How you manage the trade and your emotions from there is still entirely up to you and is where most of us really fuck up – not having a plan or not sticking with it, averaging down losers, etc. TA ain’t helping that.

    Point is…just have a goddamn plan and stick to it. How you make the plan is almost irrelevant. For me, looking at the recent behavior of the thing I’m betting on seems like a reasonable place to start. Thank you for coming to my TED talk.

  4. TA is the illusion of control in a fundamentally random world. Did your TA predict the Suez Canal blockage and the bunny guys futures bet going tits up… NO. It’s impossible.

    In fact the bunny guy proves that even when you have the best DD, the best thesis and a complete sure thing. Your luck can be bad and your bet can still go tits up.

    Sticks and tea leaves bud. Some times its right which is why you are here but all day traders use TA and most lose. Those that stick with it I’m sure have blown their portfolios out a few times learning it and will do so again only because of bad luck.

  5. I like looking at all the pretty TA charts, graphs and indicators on Fidelity active trader. They use many pretty colors and my gf thinks I am a quasi professional trader. Quasi b/c I trade from bed in my pjs. I have 1/2 an idea of what these things are trying to tell me on my random walk down Wall Street. I mean, come on who doesn’t want to be the Macd(addy), or look at the Chaiken money flow (like a money shot), and beautifully simple RSI – buy at 30 sell at 70. Right there I have red, green, blue and brown crayons on my screen. Am I right?

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