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Dunn To PerfectionFoundation

Technical Analysis · Module 4: Patterns, Timeframes & Limits · Lesson 3

Limitations of Technical Analysis

Intermediate 6 minLesson 12 of 12

Learning objectives

  • Explain limitations of technical analysis in plain language
  • Understand why it matters to markets
  • Recognise a common misconception

The concept

Technical analysis studies past prices. It cannot account for surprise news, and results depend heavily on the analyst.

Why it matters

Understanding limits prevents overconfidence.

How markets interpret it

Many professionals combine technical tools with fundamental context and strict risk rules.

Key takeaways

  • Indicators describe past prices. None predicts the future.
  • Risk management matters more than any indicator.

Knowledge check

The biggest limitation of TA is…

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