Poll: Are trends rooted in randomness?

The argument is that when random numbers are graphed they will form trends over time, and the fact the we can not predict the future lends itself toward randomness....

Yet others will say forex is a supply and demand market, so fibos and other TA are the backbone.

trend based by fundamental/news /rumor may easier to follow...
nowadays, i getting less and less beleive that trends is technicall

you don't know when the trend will start but once it is there, you can catch it.

Also, bars (or candles) only take the OCHL(Open, Close, High, Close) values to wipe out randomness. Look at 5min chart and you can see complete randomness. For the same period look at 1H chart and you can see a nice trend because most of the 5min bars values are wiped out. (that's why 5ema on 1H chart is totally different than 20ema on 15min chart)

I would say that...

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acrostically speaking

the funny thing with trend following and such is the reinforcing effect. some argue that trend based trading results in destabilizing markets (bubbles and such - its going higher, lets buy now!! US housing comes to mind right now...) so is it random - surely not entirely. where the breaking point is, that might be random ?

But, I would argue that price action in response to data depends on many random factors such as where price is, expectations, other reports that are looming, time of day. Not all data reports are a clear cut buy or sell with coresponding negative or positive news. And even those that are, the market will correct itself after so many minutes. Therefore, you cannot talk about the correlation of News and Randomness unless you factor in time also.

I will add that the "snowball effect" of forex should be considered too..... suppose there is a 60 pip drop in the EURUSD at 9AM in the NY session.... London, Asia, etc. have no way to react to the drop until they open....

NY would could then react to London/Asian activity, etc.

I'm convinced that the chart will do it has to do no matter what. Is it that fibos work because people trade them or maybe someone had to discover them first so people could trade it?

Another thought is that trading forecast news want get u anywhere. But try it with technical analysis. Sudden Interest Rate Statement? 150 pips in few seconds and than 150 pips back just to exactly fit in the existing trend and on daily charts no to be even noticed.

Simple example from last days. Chart said buy Copper... after they made that day quick 300 pips ride my mother sent me a note that there was a protest in the mines. Could the protest or any other random things be predicted from the chart? I think it works in both sides but most important to remember, charts will do what they have to do no matter what.

What do u think?

market does not always react in an expected way to news. for example if there is a strong bullish trend, then the market will tend to ignore the bearish news (and vice-versa).

the key to knowing if the market is trending (or trend is ending) is watching how the market reacts to important news events.

ie, the recent gbp/usd rally ended (when it hit 2.0130) after the market sold off on bullish news.

I also think that forex is a supply and demand market, therefore I feel satisfaction with Point & Figure daily charts to adjudicate on trend. However, I like analyzing economic fundamentals, politics and military situation to figure out trend.

Trends could be explained by many factors, for me however, fundamental factors are the main driving force. Intra-day trends are often started by news events. What takes this into a longer time frame, is that good news, are at times followed by other good news, e.g economy is recovering, and this could last for days/weeks. However, i do notice on certain days, inter-day trends that look exactly like a reaction to news but no news was released. So phsycology is at play also, i'm not sure if it's as applicable longer term though. But just looking at the charts, long term trends are much more defined. I can't get myself to trade long term though, it just does not fit my personal style...

i did not vote because i would say it depends on the TF... M1->M30 random, H1->Daily news based, > daily fundamental

Another similar thread:
http://www.forexfactory.com/showthread.php?t=7612

trends are as random as interest rate decisions..

Cycles wherever they might come from

Cycles are not random, there are definite relationships for the ebb and flow of socioeconomic markets.

I trade using cycles, I count trends in 5 waves, and corrections in 3 wave patterns. I was able to say on Thursday that Eur/Usd reached a bottom and confirmed it on Friday with a 5 impulse wave advance. I am now waiting for a 3 wave correction back to a confluence area for a long entry.

Despite the FOMC meetings and the bankruptcy of Lehman, it is not news that makes markets, it is predictable cycles of human behavior that intrepret the mood and move prices.

You will find order in 'random,' data because of the grapher. The grapher can only be random to a point. When it is done being random it will begin to repeat itself. The grapher like the murderer cannot help leaving it's fingerprints and dna along the way. It will in time become predictable. what a paradox!