How to treat traditional technical analysis

First of all, it should be noted that the status of technical analysis is absolutely different in different quantitative investment fields.

In the field of high frequency trading, technical analysis should be of little use. Irene Aldridge mentioned two papers in High Frequency Trading, pointing out that technical analysis can help to guess limit orders's book.

Technical analysis is not very useful for quantitative stock selection.

For CTA (managed futures fund), especially trend-following CTA, traditional technical analysis is absolutely the cornerstone.

Technical analysis has many advantages: simplicity and large capital capacity. More importantly, technical indicators will never fail on a large scale, and chasing up and down is human nature. However, the shortcomings of technical analysis are also obvious: large amount of extraction, long repair period and serious large-scale homogenization. Therefore, for CTA, the more you can find a stable profit strategy outside of technical analysis, the lower the importance of technical indicators to you and the lower the weight in the portfolio. If you can't find a strategy other than technical analysis at all, if you are hungry for three years and full for three years, technical indicators can keep you alive.