Much of technical analysis is the extended interpretation of two premises: markets respect levels, and markets trend. Oscillators and chart patterns derive from the former premise; trend lines and trend-following systems based on moving averages and so on from the latter.
I believe both of the premises, but I have always been inclined to be sceptical of the interpretations and systems based on them. I prefer to apply the premises to each new situation afresh. The advantage of this is that it has kept me away from snake oil. The disadvantage is that I have not been searching for a quantifiable systematic edge to use in trading.
I have been talking to an experienced and successful trader, who has kindly given me some of his time. He has a quantifiable edge. I am wondering whether this concept of “edge” is applicable to a trader who mixes fundamental and technical analysis — I suspect that success is a matter of being better than other traders in myriad small ways (which can only be achieved by experience), rather than doing something qualitatively different (i.e. having a specific edge). But perhaps this is wrong, and I do need to identify an edge. I am always uncomfortable operating within other people’s frameworks, especially when the framework is commonly used, as is the concept of identifying an edge — and perhaps this natural discomfort is blinding me to a vital element of successful trading.