There is more to trading than technical analysis

Opinion
Do not limit yourself to thinking that technical analysis is the only way in trading.
Published

October 27, 2026

I think there is a misconception among people who want to start trading that technical analysis is the only way. That was also my first thought when I started, around 17 or 18. I am not trading myself today, but I have followed people who trade, and I have listened to many interviews with profitable traders, in books such as Jack Schwager’s Market Wizards and in podcasts such as Talking with Traders and the Swedish Fill or Kill and Börsens Finest. A pattern is that technical analysis is not the only way, and that there are other things besides technical analysis when it comes to trading.

The trigger

When I listen to many of these traders, the trigger comes up again and again. You can have an idea, a pitch, or an intuition that something should happen, then wait for the trigger that confirms it, like a sniper or a lion waiting for prey. Take a defense stock like Saab, whose share price was weak for years because many countries cut their defense budgets. Then came Russia’s invasion of Ukraine in February 2022, and suddenly you had the trigger that you had been waiting for so long. Cheap defense stocks should no longer be cheap, because states would now finance their armies and have large budgets. Sure, this example is hindsight, but it shows how at least some of the people I listen to are thinking.

What they share

Some of these traders use technical analysis, but they all share a set of habits. They manage risk, they are disciplined, and they stick to what fits them. And they wait. Waiting is more common than I would have thought. You have a setup, and sometimes you need to wait, and waiting is also a decision, even if you are only monitoring. They cut their losses and take big bets when everything falls within their setup.

And every time they enter, they already know when they will exit. If all the pieces fall into place the way they thought, they have an exit price at which there is no more for the stock to go up, or down if they are shorting. And they have a price that the stock needs to hit for them to be completely wrong, and then they exit the position.

A sketch of one trade, from the idea to the exit The share price falls, then moves sideways while the trader waits. At the trigger, the trader enters and sets two exits, a target above the entry and a price below it where the trader is wrong. In one outcome, the price rises to the target and the trader exits. In the other, the price falls to the wrong price and the trader exits with a small loss. The prices are made up.

What it means for someone starting out

I think someone starting needs to see what fits them. Even within technical analysis, many different setups can be profitable. Maybe someone has a natural talent for understanding and processing news and taking bets on different triggers. Or maybe they like to be more systematic and define a set of factors that they can trade on.

I am not a trader myself. I am more of an investor, and I use a set of factor investing setups.

Limitations

The people I listen to are the ones who have succeeded, and that is the limitation of my view. There might be other traders who have not succeeded and who trade in the same way as these successful traders. At the same time, these traders have also talked about when it has not worked, and why, so it cuts both ways.

Conclusion

So my conclusion is, do not limit yourself to thinking that technical analysis is the only way in trading. Instead, choose what fits your personality, and remember that proper risk management and a solid setup, together, lead to profitable trading over the long term.