What causes support and resistance levels to be respected by the market? How does human psychology influence technical indicators? Why do chart patters occur time and time again with the same or similar result? Is technical analysis simply a way of analyzing human behavior in the financial markets?
There has been a lot of discussion about technical analysis theory at ASF, but I'm interested in the human psychology behind it.
Double tops, double bottoms, filling the gap, breakouts, capitulation. How are these and other patterns and principles influenced by human psychology? Can you profit from predicting crowd behavior and human emotions?
I'm very curious about how technical analysis and human psychology connect and interact. Would be interested in the thoughts of others.