i am not trying to be smug nor demeaning, just observational.
there are patterns in price action and similarities between market events that can have implications and relevance in today's markets. both human behavior and algorithmic manipulation leave fractal patterns across multiple time-frames that are actionable when confirmed by a convergence of other signals. only when data is slight, partial, or biased, is the decision process subject to fallacy. there's hardly a day that goes by, that isn't groundhog day in one or more markets, or that an actionable divergence with seasonality is presented that can't be used as a signal.
as long as objective heuristics are applied in one’s decision making, that does not allow stress, cognitive load, emotions, and especially bias to non-linearly affect the process, the result can be well defined, reproducible trades with a proven edge. however, the bulk of your analysis is mostly post hoc, and relies on the visual inspection of charts based on simplistic criteria and lagging indicators. One reason that it is naive and useless, is because it rarely provides estimates of expectation or probability of success, and very often is plagued by confirmation bias. in other words, you will seek out the data point(s) that reenforces your directional bias, while ignoring the ones that don't.
to use a candlestick shtik as an example, it's true that a lot of extremes have reversal days, evidently and elegantly displayed on a candlestick chart, in a bearish engulfing reversal formation, let's say; so the probability is a reversal will occur with an attendant price extreme. but, it does not tell you the probability of having an extreme and a sustained change in market trend-given that you have a reversal day.
of course, these approaches are intoxicating to the contrarian, but in a trending or momentum driven market, they only serve as a rationale to prematurely exit a successful trend following trade. in effect most naive technical analysts and retail traders remember when their methods and indies worked (selection bias) and forget the many more times they failed. This level of analysis has negative expectation, which is a fact that professionals traders realize.
