7.29Technical indicators are not guaranteed predictions
1What is it?
Every chart tool describes probabilities based on the past. None can tell you what will happen next.
2Why does it exist?
News, results and global events can override any pattern instantly. Many patterns fail.
3Practical use
Use technical analysis to:
- Plan entries at sensible levels.
- Place stop-losses below support.
- Size positions so a failed signal costs little.
Never risk money you cannot afford to lose because "the chart looks sure".
4Quick revision
- TA = probabilities, not certainty.
- Always use a stop-loss.
- Combine with fundamentals and risk management.
5Knowledge check
Q1. Can a perfect pattern fail?Show answer
Yes.
Q2. What is the most important tool when a signal fails?Show answer
A stop-loss with proper position size.
Q3. Can news override a chart pattern?Show answer
Yes, instantly.
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