Question about Technical Analysis

[snasir]

Hello all

I was just wondering if someone can shed some light on Algo Trading and role of technical analysis. Is Algo Trading based mainly on Technical Analysis or is there more to it?

Thanks

 

[daleholborow]

when you say "technical analysis", are you referring to the arts and craft activity that is the drawing of occasional lines on plots of share price movements, and tagging said lines with comments like "breakthrough rally triggered nowz" and "something bad happenin' herez"?

 

[Uncle Max]

Many non-arbitrage algorithmic trading systems rely on the idea of trend-following, as do many hedge funds. A relatively recent trend, both in research and industrial practice, has been the development of increasingly sophisticated automated trading strategies. These often rely on underlying technical analysis principles.

This should help:

Technical analysis (From Wikipedia)

Algorithmic trading (From Wikipedia)

 

[Adam G]

Another possibility is tying technical analysis to intermarket analysis. Many people use intermarket analysis as the base of an algorithmic system and then use technical analysis for filtering trades and for exit criteria.