Why do people use technical trading systems in futures markets?

I try to combine the two. Fundamental thesis with a technical entry and exit.

The academic papers are one thing, but real trading is another. Those studies usually look at pure mechanical systems without any discretion, and they ignore how people actually trade in practice. I tried pure fundamental trading for like 6 months and got destroyed by timing. You can be right about the supply/demand picture but still lose money if you enter too early. Technicals help with that part, even if they're not perfect. Most floor traders I know use some form of chart reading alongside fundamentals. The market discounts everything eventually, so price action gives you signals about what the big money is doing before the news confirms it.

Technicals work. Why do you think they don’t? You don’t need much, just identify objective levels you want to target and trade them during the most liquid hours or immediately after the news. You’ll save tons of time that way

First of all what kind of trading are you talking about? You know there are trades that lasts from microseconds to years, right? Do you really think fundaments matter in a 1 minute chart? That 0.01% movement is fudnament based? It is not 99.9% of the time

This exactly

Hey , you know when someone has zero clue what they’re talking about, why try and introduce logic to them? 

Fundamentals matter very little in general I’ve come to realize, you’d need an algorithm to fire off and be scanning for news all day long and even that is away baked in or set up to happen upon break of the news and no one’s quick enough to take advantage of that I’m sure you’ve heard the saying “breaking news is old news” 

Some volume and order based concepts reflect the psychology and goals of participants so while they are technical, they have rooting in reality. Technicals are better traded with context, vs. pattern matching. On the question of why, I think it’s because clear, systematic rules are easier to grasp and an oversimplification of what it takes to become profitable.

What studies have proved technical analysis doesn’t work?

OP made it up.

Here is one, and if you need more just look up some of the papers in the reference section of this article: https://ageconsearch.umn.edu/record/19039/files/cp05pa01.pdf

This paper does not support your claim that "Academic studies have clearly shown that consistent long-run profits are nearly impossible to generate with a technical approach." The study tested multiple technical systems and found lack of evidence supporting long-term profitability. But testing a number of technical systems doesn't mean every possible approach was tested, and lack of evidence is not proof of impossibility. The study also does not compare technical analysis against fundamental analysis, so it does not establish that fundamental analysis would perform any better.

You need both. Fundamental for direction, technical to confirm and for timing.

I dont think thats true but even if it was, if so many people trade technical analysis and have similar levels, then those levels become important.

IMO this is exactly why things like VWAP, EMAs, SMAs work. If everyone is looking at VWAP for support, more people will buy as it draws back or sell as it rises to VWAP; essentially the self fulfilling prophecy type of deal. I’ve said it before and I’ll say it again here for OP to read: NVDA developed a tendency to drop on earnings (despite great earnings), everyone knows NVDA drops on earnings reports, people sell/short into earnings reports, selling pressure causes NVDA to fall on earnings reports, NVDA now has a self fulfilling prophecy to continue to fall on good earnings reports. It’s not because of bad fundamentals, it’s because it is the pattern other traders recognize and they all start to trade in a similar manner regarding technical analysis.

I had a whole ass lecture on technical analysis in one of my finance classes. Im sure they taught us because it doesn’t work. The professor was commodities futures trader too.

Academic studies have clearly shown that consistent long-run profits are nearly impossible to generate with a technical approach

Markedly false statement? Trend following is technical trading and has been shown to generally perform well, sometimes outperforming market and certainly long term profitable. Maybe stop spewing BS and read a book? P.S. I'm really fed up with people *thinking* academic studies disproved technical analysis or trading, like how do you think HFTs trade? That's **technical trading** and they make billions

HFTs make money because they get information a millisecond before everyone else does. Information advantage generates their profit, not some technical system.

Take a book and check what method of trading on those informations and modelling those systems use. One of Rob Carvers books, e.g. "Advanced Futures Trading" might be helpful. Hint: it's still technical, information alone requires a decision, decision requires a model, HFTs trade mean reversion. Please don't LARP you know what you're talking about.

I saw an interview of one of the lead guys over at Jane Street. He mentions the types of strategies used in terms of speed (didn’t actually dive into the strategies due to confidentiality), and the ones you’re referring to where they receive information barely faster than anyone else have to be so streamlined in terms of coding and execution rules that outflow essentially has to begin before inflow of the information has even completed. Meaning there is literally no time for fundamental analysis in those environments build for pure speed. It’s all execution based on technicals. Longer timeframe maybe more fundamental when it comes to equities and a few other asset classes, but they are far from end-all-be-all.; companies with earnings showing consistent growth is likely to experience consistent growth in its share value and companies with bleeding balance sheets often see lower and lower share prices. However, commodities being more exposed to geopolitical factors are harder to determine fundamentals on a continuous basis. When Iran closed the straight of Hormuz you can’t fundamental your way out of knowing that beforehand to short oil futures. You can however trade off the technicals of the change in trend with a more educated decision by adding the fundamentals of the global supply change. I don’t believe one is ever truly more superior than the other, and the best way to trade is based on essentially some sort of a mix of the two. I see stocks daily release amazing news and nobody cares because volume doesn’t come in to confirm a new trend. If I bought those companies purely on the fundamentals of good news my expectancy would be dogshit because the only news that matters is the news others pay attention to. Conversely if I traded some super thin liquidity stock because it has a beautiful bull flag forming but there’s no fundamental change in the company, the bull flag pattern won’t resolve with positive expectancy because there no real reason for the technicals to play out in my favor either.

Weird. Real life pragmatic approaches show no long term portfolios are programmed for fundamentals

No real high performing portfolios that is 

You sound like an idiot not for nothing  You realize what candle stick charts are right? What’s it’s showing in essence? Just a plain depiction of human behaviors/reactions. Psychology that will never change so long as there is a human brain making those decisions. No this is why certain TA is the best way to scale an accounts and trying to play the fundamentals game will leave you pulling your hair out and coming here saying the market is rigged.  Rest assured though you exploit  that very same psychology and you’ll do just fine, bc again. It will never change and hasn’t in over 100 years 

Technical indicators are statistically weak individually but when combined with other indicators, regime filters, fundamentals, volume analysis, etc and across multiple markets you can start to find nuggets of edge.

What most people call technical analysis, meaning candlestick patterns and chart shapes, is in my view mostly useful for timing entries, not as an edge by itself. Futures are better understood as a continuous two-sided auction, so the "technical analysis" that consistently profitable futures traders actually use is auction market theory and market/volume profile: where value is being built, where it's being rejected, who is in control, and whether a move is being accepted or exhausted. On the academic point, it's very hard to prove scientifically that technical trading doesn't work, because the studies test what can be fully written down as rules. Profitable discretionary traders mostly aren't trading patterns you can fully codify. If you could, a program could replicate it and the edge would be arbitraged away quickly. What they rely on is context and pattern recognition built over thousands of hours of screen time, which doesn't show up in a backtest of "head and shoulders = sell." Also, "academic studies clearly show" is overstated. Systematic trend-following in futures (time-series momentum, CTAs) is one of the better-documented anomalies in the literature, and it's purely price-based.

Your definition of "fundamental" applies to commodities specifically, not futures generally. No there have not been academic studies "clearly showing" that long-run profits are "nearly impossible" under technical analysis. What studies are you referring to?