Which do you prefer to use? Classical technical analysis or modern technical analysis? If you don't know the difference, please see the difference between the two below.
Classical technical analysis is an analysis by studying the PATTERN/PATTERN of stock price movements. Examples of classic technical analysis: studying candlestick patterns, determining support and resistance lines, determining stock price trends, determining trend patterns (such as head and shoulders, triple tops, triple bottoms, bowls, etc.).
Modern technical analysis is a technical analysis that studies INDICATORS to determine buy and sell signals. Examples of modern technical analysis are the stochastic oscillator, relative strength index (RSI), relative volume index (RVI), moving average, MACD.
Modern technical analysis does not study candlestick patterns. Modern technical analysis looks at buy and sell signals purely on a chart. As you can see, like the RSI, all moving averages are purely chart analysis.
"Which is better between the two?"
All have advantages and disadvantages of each. Modern technical analysis is easier to learn because you only need to learn the death cross and golden cross to determine buy and sell signals. That's it. However, modern technical analysis is less accurate when used to predict stocks than classical technical analysis.
Classical technical analysis, because you have to study patterns, the assessment will be very subjective, so it's a bit difficult to learn. For example, I could say today's candlestick formed a bullish harami, but you could say it still hasn't formed a bullish harami. Determining support and resistance lines also does not have a right or wrong benchmark, it is very subjective. But as I said, classical technical analysis is more accurate in predicting stock prices.
Classical technical analysis can be better and more accurate to predict stock price movements. How can that be? Let's see the explanation below.
In classical technical analysis, the price will give a signal to the pattern, so when the stock price tomorrow there is an indication that it will fall or rebound, the stock price will provide confirmation. Confirmation will appear in the form of patterns, such as doji, head and shoulder charts and so on. Because the price provides confirmation, the pattern that is formed is in accordance with what the stock price "wants". The stock price says it wants to go up tomorrow, then the pattern that is formed is bullish. The stock price says it wants to go down, then the pattern that is formed is bearish. So, more accurate.
Whereas in modern technical analysis, it is indicators that will provide signals to stock prices. An indicator that controls stock prices. The indicator forms a golden cross and the indicator tells you that tomorrow the price will go up. Well, if it turns out that tomorrow there is bad news about the issuer, then the stock price drops, which means that the golden cross is invalid, right?
So true. I'm the one who monitors market movements every day and I didn't want to learn classical technical analysis because the reason was difficult. But now I predict 80-90% stock price using classical technical analysis. Because in fact, I predicted using modern technical, the chart has a golden cross, it turns out that tomorrow the price will go down. See an example of a BKSL chart below. The stock price looks like it's golden cross but the price is going down again
