(Paris) With a chart and a few lines, technical analysis aims to help investors make the right decisions on the stock market. At the show dedicated to this method of tradingwe swear that “it’s not a crystal ball”.
“Bearish channel”, “ascending wedge”, “shoulder-head-shoulder”: these terms represent “figures” identified in the evolution of the last days or months, which would make it possible to anticipate the price of a stock or of a financial asset.
“It’s like the weather: we identify configurations from the past which have a probability greater than 50% of recurring,” explains Denis Desclos, president of the French Association of Technical Analysis.
He was present at the “technical analysis fair”, which brought together speakers, brokers and trainers looking for new clients on Friday next to the Eiffel Tower.
Up to 4,000 people are expected for this 25e edition, according to the organizer, André Malpel. “We are trying to prove that it is not a crystal ball, but that there are real reasons” which support these practices, he defends.
Most participants invest every day in the markets, carrying out several dozen very short-term transactions, alongside their work.
Male environment
“When some people take cigarette or coffee breaks, I take trading “, especially on French luxury companies, says William, 49, financial manager in a public organization. In total, he can invest up to “200,000 euros” in one session.
At 21, Mickaël Gundog is a student at a business school. A year ago he launched into the trading and technical analysis, which came to him “via social networks”. Books, videos, webinars: everything goes, but the learning “is going to be long”, he admits.
He hopes to make a living from technical analysis “in the long term”, but has partly invested in a Canadian platform, MyForexFunds, whose funds were frozen in September due to accusations of fraud.
There are two risks for a beginner: poor training and “coming across a broker who is not regulated,” explains Mr. Desclos.
He recommends turning to a company that is “well established”, a guarantee of reliability in addition to registration with the Financial Markets Authority.
Weaving between around ten kiosks – paying for exhibitors – students, working people and retirees sharing their experiences.
Women are almost absent: they represent only 5% of those registered, says the organization.
Bettina, 68, relies on her own computer program to analyze several “parameters” to know whether to sell or buy.
“My indicators are working,” she assures. But sometimes, “I get so caught up in my momentum and I fail, because I didn’t take other parameters into account.”
She also dreams of abandoning her professional activity, but the risk is to become “desocialized”, she explains, especially since she recognizes “a little addiction”.
Vomiting camel
The effectiveness of technical analysis is subject to heated debate. “In France, we are considered alchemists,” recognizes Mr. Desclos.
By analyzing more than 10,000 funds, three academics, including Frenchman Christophe Faugère, found in 2013 a “minimal, but statistically significant” better performance for managers who said they used technical analysis.
The field can also sometimes turn into a farce. In the mid-2010s, an editorialist from Financial TimesKatie Martin, had started “just for fun” to draw several crude lines on the price of a few stocks giving the sketch of a vomiting camel.
She broadcast the charts on her Twitter account (now X), ensuring that such a configuration implied that the stock in question would continue to fall.
“Some people took it a little too seriously” and the figure of the vomiting camel was taken seriously several times, she said later.