The Online Investing AI Blog

Technical Analysis seems to be more of an art than a science. Everyone seems to have their favorite indicators. However, there is one small problem with they way that people choose them. They choose them based on what seems to work, without really analyzing how well they work.

You can still make money using technical analysis. The trick is that the analysis is not really important. Other factors such as trading consistency and money management are far more important. But that is the subject of another post.

The subject of this post is how technical analysis is changing, and becoming more effective. Since everything in life is getting better, why shouldn’t technical analysis? Technological innovation has revolutionized our lives in the last 10 years, and we believe it will revolutionize how people trade as well.

Shouldn’t this technological advance give us better indicators? Clearly computers and the internet have made technical analysis easy and free. Did you know that charting itself is a relatively new invention? Markets have been around for thousands of years, but the first stock charts were created just 80 years ago.

INO.com offers a free stock analysis that has useful information about technical indicators. They have attempted to create a more reliable signal by combining common indicators and mixing time periods. There’s nothing revolutionary about that. However, one interesting aspect about what they are doing is that they distribute this information for free through the internet and email.

Personally, I think that technical indicators are still in their baby stages. A new, more powerful approach to technical analysis will measure how accurate the technical indicators are. Most people just guess or choose indicators that have been accurate in the past through backtesting. But I think there is more to be done. Perhaps the above integrated analysis is the beginning of a new technology that will give us better technical indicators and make us more successful traders.