Post-hoc Technical Analysis

Michael Harris over at Price Action Lab:

Saying that “if these levels hold prices will rise and if they do not, prices will fall”, is a statement that confuses event order. Price moves first and then we decide whether some level or indicator was violated. If a level does not hold, it is because price already moved below it or above it. It is not the other way around.
In technical analysis, use of any derivative of price, including support and resistance levels, indicators or patterns, is often useless, unless there is a measure of the probability of some event. Otherwise, just describing these levels is either only stating the facts or it is naive analysis due to ignorance.

Source: Technical Analysts Who Have Their Cake and Eat it Too


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