Do you believe this market is random?

I agree. It's a funny thing because there is this black and white argument going on about "is the market RANDOM" is the market NOT random..

What is RANDOM exactly? What is not random? People are both predictable and unpredictable, so therefore the market is too.

Maybe the market is random sometimes and other times not so random.. As for PROOF...?

Go try it and see

I believe the market is a market.. wow

Buyers buy and sellers sell... It's about as simple and as complicated as that.

If this were a family tree, the above words are Adam and Eve

(Almost a poem, By Walter P. Wolf)

I kind of agree with you, over the longer term the market appears to have some order and over the short term it seems random...

I will be in the random camp always because that mindset makes profit for me, and at the end of the day that's all we should really care about..

I kind of disagree with you, It could be random short term or long term.. That's the thing.. The flow changes like a chameleon , then stabs you like a dagger..

I'm quite sure you could relate.

How Something Can be Long Term Not Random and Short Term Random ?
Everything at High Tame Frames ,we Have Exactly those things Even in Tick charts.

I really don't want to do this because this thread shouldn't be bumping up any further.

The 1st post was started on : Nov 5, 2013 2:51pm

And all the people that have chance for input stop around Nov 11,2013.

Also the question should already have been "absolutely answerED" in the timeframe that's why "no one need to input any further.

Apparently one person have enough free time...to read old post and decide to comment...

since there newbie who alway read the 1st page... it's likely they will read this thread so this thread could make or "break" them if they really take this thread seriously. Because the ideas is far extremely complex for a newbie to understand and that ultimately in the end. It require lot of chart time forward and back testing which is something not every one willing to do to have an "absolute" answer. All the pro know the answer but some know but just "refuse" to accept the answer.

So let's start...

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To know if the market is random you need to first know the definition of random.

random
adjective
: chosen, done, etc., without a particular plan or pattern

Full Definition of RANDOM
1 : lacking a definite plan, purpose, or pattern b : made, done, or chosen at random <read random passages from the book>
2 : relating to, having, or being elements or events with definite probability of occurrence <random processes>

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Question 1: What random variable that NO ONE can control exist in the market?

Answer 1: people emotion and decision, News data, Big Shark/banks big order can come in at anytime.

Question 2: Since forex have a whole study field on "pattern analysis" does that mean the market is NOT random since pattern DOES REpeat from time to time?

Answer 2: The answer is NO, even if pattern repeat it is STILL random, because you do not know WHEN exactly will the pattern appear AGAIN. Nor do you know that if the PRE-Setup will actually form the "upcoming pattern".

Question 3: When you know something 100% happening then it's not random. So does that mean you see pattern formED and it goes EXACTLY like you say does that mean the market is not random?

Answer 3: NO, because you can't get it right every time because the of the random variable exist. You were just "lucky you get it right this time".

Question 4: So now we are head toward the main objective: Is the market random? OR Is market PROBABILITY?

Answer 4: The market is BOTH: Random-probablity. Example: A coin is 50/50 EACH FLIP ALWAY have 50% success in head or tail. But 20,000 trials flip. You will see there will be MORE HEADS than tail or more tails than head. But it's definitely not 10,000 head and 10,000 tail.. EVEN though the probability it CAN happen but it won't because the "God created random unfair like that". So just because you know that it cant' have 10,000 head does that mean it's not random? No
because each flip is 50/50 random by DEFAULT. What you know is PROBABILITY not the random.

Question 5: So now we have conclude the market is a Random-Probability, how do you win the market.

Answer 5: There is only ONE WAY to win the market once you have "determine the market is a random-probability" and that is : YOU NEED to have a Money Management way that BEAT the 80% fail probability of most of your trade.

Question 6: Great now that you know market IS a random-probability but it's very likely you won't believe me... because your experience.

Answer 6: Ask your self can you or anyone really know 100% sure of the future candle? If the answer is NO, why? And how come you know 3 apples + 3 apples = 6 apples.

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So that's my input on it. It take me 4 year to fight against the idea of the market is NOT random (lot of money lost in process). But after I have accepted the market is random-probability I began to profit because my system changes, my mm changes, my entry changes. and most importantly my EMOTION changes.


So to the newbie that read this: ARE you going to prove the market that you are BETTER than the random market? That you see through all? That you WILL BE the DESTINE ONE to win it all..?

(here is a hint: You should try to fight the random because you really need to try everything that exist in retail forex. The mistake that you went through will be invaluable for your future success. If you were just to straight out accept market is random-probability and because you are still new. There is one thing that you might not able to master is your GREEDY emotion that come in unexpectedly because....$$ is rolling in ... ARE YOU ABLE to handle that with your newbie discipline....lol)


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This is still going on? It's not even worth all that research, it's something that you find out naturally the better you get. I thought it was random to me when I first started out too, but the better I got, the easier it is to see. That's my last word on this, there is nothing that can convinced anyone of this, you just have to be at the level to know.

you never heard about multi year cycles? or seasonal cycles?

people would be convinced if you could supply any piece of evidence to back up your claims, but nobody can.

here's a good post about both sides of the argument.... http://www.investopedia.com/articles...om-markets.asp

like they say, it is what you believe that is important,

This line from the article sums it up best

"It is the inability to see everything that makes stock markets look random"

Hey what the heck, I'm going to give you the entire paragraph.

"It is the inability to see everything that makes stock markets look random. Rush hour traffic looks like chaos when you are in it, but from far above it looks as well designed as the circulatory system. This is where a structured market comes in. You have to make generalizations and somewhat marginal decisions to clear-cut the forest and get down to a few promising plants. In a truly random market, this would be impossible."

And this is what I have been saying, if it was something else I probably would have had the research info on it, but the info that I have I got through experience, somethings are just the way they are. It would be a waste of time trying to prove something like this, it would make no difference to a person not ready to read the market, they would go back and try and give up and put their hands in the air and go back to saying it was random. If you truly believe the market is random, then you are gambling not trading.

I Have Heard ! but you said in long Term it is possible to not be random but in Short term can be !
We have Exactly those cycles in Tick Charts too !
Market is Exact Peace of Fractal Which everything happen at Large Timeframes or Large Cycles Exactly are in Micro Timeframes

The next tick is 100 percent random from our perspective.nobody could argue that .so yes we can call the market random .BUT it does not mean it does not have purpose.the middle part is for sure random but the staeting point and end point are not.

Ill use the drunken random walk home as my example.the drunk has no idea how he got home from his known destination to his known arrival point (home).but 95 % of the time he does.he only knows his start location and end location .the route was RANDOM.

The next tick is 100 percent random from our perspective.nobody could argue that .so yes we can call the market random .BUT it does not mean it does not have purpose.the middle part is for sure random but the starting point and end point are not.

Ill use the drunken random walk home as my example.the drunk has no idea how he got home from his known destination to his known arrival point (home).but 95 % of the time he does.he only knows his start location and end location .the route was RANDOM.

Since this is still a viable question, and a lot of answers refer to fundamentals, allow me to provide a mathematical response to "randomness", since it is a mathematical anomaly.

In my experience, the markets are predictable, very predictable, in all but five situations.

1. Stop hunts. If you do not think your stop loss is intentionally triggered, you are only fooling yourself. The worst type of stop loss trigger is the spike candle and it is impossible to predict. It usually occurs within 30 minutes of a market open, 5 seconds to 5 minutes before a major news release, during double tops and bottoms, head fake trend line breaks, and spike candles going opposite directions near each other, or railroad spikes.

2. Double/Triple/Multiple bumps on a pivot line. Double tops and bottoms are mostly large orders being exited in increments so price does not spike the opposite direction, create panic/greed, and move the market from their desired exit point. The intent is to get all the orders closed at nearly the same price. They exit their positions, hold for bit, let other traders think a top or bottom has been reached and take the opposing trade, then exit more of their position. It causes the "other" traders positions to hit stop loss, retracting price back to where the large positions really want to exit. Once they complete their liquidity, the market can go the other way. This usually occurs at major pivot lines. It is random because you do not know when it will stop nor whether price will bounce or continue at the pivot. As traders go against the large order exit, but the large order exit continues until eventually the large order overcomes the opposing traders and you get the parabola shape that traders call a double top/bottom. You have to be patient until probability reoccurs.

3. Consolidation. This is the level where buying and selling begin to equalize. Well, not really, but it appears that way. Consolidation itself is not random. You can see it coming. It is just another market maker trick. The intent here is to get you confused so you enter and exit many times and usually for a loss. The other intent is to bore you into closing your position. The other intent is to make you guess which direction the market will go when it ends and to enter and hold onto your trade while they figure out when to stop hunt you. The direction following the consolidation is random...to you. You can predict it by finding the time frame that has the trend line containing the consolidation and waiting for it to break. Be aware that the first break might be a head fake because they want to activate pending orders that are in the wrong direction, and stop losses that are in the right direction. The pending order is an automatic loss. The stop loss hunt will cause you to lose rather than be in the market in the right direction after they activate your stop.

4. Stair steps. The reason the market can be predicted is because the volume of orders during a given day, or session, tend to be toward one currency or the other for the length of that session, or day. Now fundamentals, or the lack of them, finally have a role in the market. Volume will decrease when there is no news releases planned for that day. Without market sentiment to a news release, the market makers slow down their activity and it becomes more of trader against trader, or banker against banker. This creates a pattern I call stair steps. Your choices are either to sit it out, or look for a higher time frame chart that is still predicting the overall direction and be prepared to hold your position, and your breath, for the entire session. On the smaller time frame, price is in a somewhat predictable range trade heading in an overall positive or negative direction. However the range is usually too tight and requires too much involvement and skill to trade it effectively. Why walk into a battle zone. Just wait it out.

5. Sudden position trade by large bank. It is rare, but sometimes a monthly or weekly target is hit and a bank will transfer a huge amount of money from one currency to another all at once. Or some global crisis or banking crisis will happen and huge transfers will occur.

Hope this helps. The "randomness" most people refer to is caused by market action of opening and closing trades. Sure, each individual trader's action, timing, and order size is random, but when the majority of traders agree to a direction, it is predictable. This is easily found by increasing the sample size beyond "1". Your task as a trader is to figure out WHY the majority of traders enter and exit when they do. Once you figure that out, you simply join them and make your profit

I can be Kinda agree with this one ,yes there are points which market is not predictable at all like drunken man but most of the times market is predictable

have you any evidence of that or is it just a belief? It should be fairly easy to prove is it is true?

Spot on the money.

you didnt read it all, I quote

"The Bottom Line
In order to be an effective investor, you have to do what quantum physicists do, consider the market as both random and efficient. There will never be a perfectly efficient market as long as there are investors buying into it. This doesn't, however, mean that the market is so random that no effort on your part can help you profit. You should never remove uncertainty, or by extension, risk, from your thinking, but you should act as if forces that are generally efficient rule the market. After that, leave the debate up to the economists who are paid to keep it going, because sometimes being a ladybug in a giant forest is enough to worry about on its own."

as for the gambling - trading debate... that is another thread entirely. I'm happy to see it as a gamble, when I'm trading I want a guaranteed outcome and nobody in forex has that

Again totally agree.concidring the post by dkrock .the unknown variables.thats why i take out insurance .in the case of trading that my stops.you see having high probability of the start point and end point the unkown variables being the drunk got nocked down by a car he gets taken two hundred miles for spinal surgery before he eventually gets home.my insurance covers me (stop).fortunatly more often than not he completes his journey .