Division of analysis into two subcategories (fundamental and technical) seems to be a concept that has not profound base under it. If you find standard definitions of these and compare them, you'll find that major difference is the subset of data which analysis rely on. For technical analysis - subset contains historic prices and volume data, for fundamental - financial reports data, various macroeconomic factors (e.g. GDP, balance of trade). When you hear "support line" of "head and shoulders pattern" I guess you associate these terms with technical analysis. But why? Because it's "common knowledge" for trader/investor? What if I build a chart of unemployment (or any other quantified item from "fundamental" subset) over time and draw some support/resistance lines? What kind of analysis should it be?
Personally, I prefer another division. There are scientific analysis and non-scientific analysis. Scientific analysis based on creation of hypotheses about market data and testing validity of them. If hypothesis is valid, it can be used for future predictions and making trading decisions. Scientific analysis implies strict formalism and do not use concepts that cannot be accurately described. Before use of e.g "support lines" it needs full list of rules how to draw them and where points should be and what hypothetic influence should be on price near this line (also it drives to describing nearness). And after that - testing. Any other analysis that can't afford that formalism is non-scientific. I do not say that "support lines" does not work. But I don't see cases when this term at least described strictly - thus it's not scientific analysis. (leave in comments link to robust definition of this term if you disagree). If other people draw them and somehow use them - it does not make this type of analysis scientific. If mentioned people like drawing lines, triangles etc. without understanding what for - why don't they become artists (maybe suprematists)?
to be continued
Personally, I prefer another division. There are scientific analysis and non-scientific analysis. Scientific analysis based on creation of hypotheses about market data and testing validity of them. If hypothesis is valid, it can be used for future predictions and making trading decisions. Scientific analysis implies strict formalism and do not use concepts that cannot be accurately described. Before use of e.g "support lines" it needs full list of rules how to draw them and where points should be and what hypothetic influence should be on price near this line (also it drives to describing nearness). And after that - testing. Any other analysis that can't afford that formalism is non-scientific. I do not say that "support lines" does not work. But I don't see cases when this term at least described strictly - thus it's not scientific analysis. (leave in comments link to robust definition of this term if you disagree). If other people draw them and somehow use them - it does not make this type of analysis scientific. If mentioned people like drawing lines, triangles etc. without understanding what for - why don't they become artists (maybe suprematists)?
to be continued
