I'm not an economist, so I only have an "interested outsider's" view on the literature. I have discussed exactly this question with economists though, and received conflicting information.

There seems to be a few respectable articles these days (as in: they appeared in a journal that is respected in the field ), but I get the impression that there's a bit of a divide to begin with: those articles are written by people that assume that TA/market forecasting/systematic trading works, and they analyze particular methods.

Then there's the vast group of economists that subscribe to EMH in varying degrees of strength, and those would seem to be prime candidates for a more rigorous testing of TA/forecasting etc. and whether it produces statistically relevant results, but I'm not aware of a broad, rigorous study like that.

I'm personally not too bothered by that: I have previously made the analogy with chess opening theory or Go strategies -- they pretty clearly work, but are not (yet) formalized to the degree where they could be subjected to a test that holds up to academic standards.

That said, if someone else does know about a (peer reviewed even?) study on the efficacy of TA, I'd be interested.

EDIT: I'm a lazy bastard. I just didn't look very well. How about this one? Looks pretty good to me as a broad overview:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=603481

I'd never call TA 'rules', but let's say the question is: do all methods apply equally to rising prices as they do to falling.

No, though some do.

Example of those that do apply symmetrically: moving resistances (say, based on a moving average) are considered support once they are broken convincingly.

Example of those that don't: Most indicators meant to signal a reversal of some trend inside larger market trend don't.  Say for example the larger market trend is a bear market, like the one we've seen since December (and that we seem to have left last month). Say further that you are planning to trade smaller "swings" inside this larger context. If you would trade purely reactive, based on momentum signals like moving averages crossovers, you would probably demand a lot more evidence that the price about to go up than that it is about to go down. In other words, you'd look at a more sensitive indicator to tell you when to sell, and a more lagging one to tell you to get back in.

EDIT: if you mainly have candle patterns in mind, then I think most of those apply symmetrically (e.g. hammer vs. inverted hammer). But perhaps someone who's more knowledgeable about those can comment on that.

ITT some in here underestimate the (call it "psychological", if you want) effect a ~6 month bear market has on the following consolidation-slash-bull market, at least initially.

Remember how, after every ATH rally the bears need some time before they really get their way? It's the same now, only in reverse (and the amplitudes are slightly different due to the even larger trends governing the smaller segments).

A question, Thomas:

I appreciate Electrum and how you and the other devs maintain and develop it, a lot. Any way I can contribute?

You're not exactly openly asking for tips/donations (on the frontpage of electrum.org, for example), so maybe you don't want or need any, but I thought I'd ask rather ask, because I feel like I should contribute at least financially to this fantastic project.

.

sorry. wrong thread.

Yeah Mat, don't do that.

Just say gypped, completely inoffensive. I have that on good authority from a spic.

Agreed on the relevance of holding price of ~530. Ideally: not even breaking it, less optimal, but perhaps okay: breaking through, but immediate rejection and daily close above.

Mentioned it before, in another discussion of ours, but I don't think much of the trendline you base the price target on. That trend feels forced to me. But we arrive at similar conclusions based on different methods (mine is fib levels and BB), so who cares.

The following is now what I consider the 'best case scenario that still has hope to play out', essentially a replay of the April/May situation, only $80 moved upwards. It's a sketch of course. Add more wiggles and small swings in between as you see fit.

True. But a) not all my coins are on an exchange, and b) if I had always avoided the counter party risk, I would have never had the amount of them I have now. Nevermind. Just realized you were talking about the risk you would face when un-coldstoring for a single trade. Agreed then.

Absolutely agreed. Not that I consider the 2013 SR flash crash abnormal either, but the volume tells a different story now than back then.

If I had to put it in numbers: I'm 80% certain we are *not* on the verge of the super exponential leg of a new ath rally.

The climb out of the bear valley will however resume soon, I believe. Just not "straight up" like last year.

Agreed. But it was also an excellent opportunity for a short term trade.

I had originally planned to not get into this swing, but at some point it became clear there was real panic building up. And there was that tasty wall at 600. Out at 600, back in at around 555, minus slippage on the re buy and that was still a pretty safe 5% coin profit. Pleasant surprise.

Right. Why can't everyone just be nice and hodl, like they do in the markets of fiat currencies... oh yeah, right.

Don't think we'll go that far tonight.

And, yes, I think, if we get there, we'll at least close above, even if we break through it for a moment.

I'd say that's the difference between "trigger" and "reason", and what you list are all triggers at best. But you're right, I have no way of proving my way of explaining the market is the correct one. I wouldn't quite call it religion, but I'm okay with "bunk science"

I will however repeat my point: how come, in the absence of knowing the "news du jour" ahead of time, so many of the more experienced traders in here said that we would almost certainly see a major move down after reaching a local peak near 700? Not claiming they would predict the exact price at which that would happen, but the blueprint was repeated often enough.

Are you still looking for "fundamental reasons" for any minor (or sort of minor) price swing?

If so, how come I (and many others, I'm sure) where able to sketch out this drop about 2 weeks ago, looking at the charts alone? All of us just got lucky? Every damn time this happens?

I'll quote you on that one, for when the inevitable rally happens, and all caution (and sense) goes out of the window again...

What about me? Oh, I get it...

Yeah, I personally don't re-post one line tweets saying "sell nao".

Hehe, wouldn't call it prophecy. Common sense, plus fib levels and BB :D

Plus, I'm not committed to touching $530. That'd just be the 2nd worst case I can see happening.

Human emotion is, however. Metaphorically speaking. And that's what (to a certain degree) determines price.

Shock.

Gasp.

Re-test after rally!

Me neither. That's the point. Daily SAR is quite lagging to begin with, and depending on the larger context, it will produce a signal that is going to cost you. So I'd caution anyone selling (or buying for that matter) just because some guy tweeted "SAR down/up".