Is the market random or not ?

I'm making this thread to show all unsure people if the market is random or not, followed by hopefully the right answer.

I got this "inspiration" when I saw people who have done 1000 + + trades (1kt's) claiming that trading is random, followed by a heavy debate.

So I want to make this plain and simple. Fixing a vote-pull and looking for people with at least 2 years of market-experience or at least 1k trades (live) behind your belt.

I don't feel it's necessary for any explanation. If you have done over 1k trades you should now the answer, IMO.

Want to give an explanation ? Same criteria as for voting, please.

Somehow I feel comfortable about the result. Otherwise I would look rather stupid : <-- Edit: I'm starting to search for my donkey-caps to wear.

aediaz could I point out following thread to you, funny enough, read post #32 and #34, I think they put the markets in a very good perspective!

http://www.forexfactory.com/showthre...t=76647&page=3

What do you think?

Wanted to vote for NO but randomly (hence the poll question) (or so to say accidentally) choose yes

Witnessing randomness in disguise lol ?

It might not be random, but what is important is "is it random to you or me?" And without an edge, it is random.

You see THAT'S randomness !!

There is always someone out there to obfuscate the otherwise very clear picture! lol

random?.... lol, no.

At a point in time I enter a position in the market based on all available information. Between entering the position and my take profit being hit, ANYTHING CAN HAPPEN (new information) so the market has the POTENTIAL to be random until my take profit is hit. Once my TP is hit, I shout from the hills, the market is predictable!

btw, all those small movements between entering a position and TP hit......are those random? lol

I got into this discussion about randomness with some work associates. I associate market randomness or "chaos" to the Theory of Relativity... it all depends on your point of view.

aediaz,

I'm one of those "1KT traders that should know the answer", in your opinion. Sorry to have to tell you that my answer is different, and I venture to guess I may be the one you're talking about since I've had this discussion before. The bottom line is forex IS random.

Can you predict human decisions of buying and selling patterns?

Really?

NO YOU CAN'T. WHY? Because if you could, you would be a fortune teller, and I sure as hell don't believe in those.

Why MUST you be a fortune teller? Because NO ONE in this world can predict human decisions 100% of the time.

Now, with this being said, successful traders must always have probabilities in their minds. "Is it probable I will win this trade?" Or "Will this news affect this currency this way?", "What's the trend?", etc. Does this mean forex isn't random? NO. It means there are probabilities of events happening. Never will the probabilities of the intended event reach 100%.

Bottom line: Forex is random. If it wasn't, you wouldn't lose.

Tell me you don't lose, and I will tell you there is someone for whom forex is not random.

The market isn't random because it's the sum of human decisions. Psychology is very important.

I agree that there is a lot of noise in the lower timeframes.

Regards - Xaron

The sum of human decisions can change randomly. Thus, trend changes. Do you know when trend changes will occur? No. I'm not sure I agree with your argument, respectfully.

Kevin

PS If you do know when trend changes happen, can you tell me when the dollar will rebound?

Everything around us can be represented and understood through numbers, if you graph the numbers of any system patterns emerge. In the case of forex (and the Universe) there are unknowns that effect what can be measured with limited instruments that fail to quantify every variable in a system.

If there are probabilities, then it is not random.

Is blackjack random? No. The MIT team proved it.

Actually they proved that there are times when it is not, and they greatly increased their bets when probability was in their favor.

Welcome to forex.

I personally don't believe that forex is random. If it were, then I wouldn't be able to look at price action patterns that consistently come up and make a profit off of them. If they were just random in their placing, then they wouldn't come out with a positive effect. At times, it can be random, say during news events, when everyone - buyers and sellers - are panicking. WHen people panic, they act ridiculous and that's exactly how the market acts at that time. Once things cool down, and the market gets its head back on, then it's back to the same old shuffle. I used to think the market was random because I was losing money and wanted to blame it on something else other than my crap analysis lol

For instance, right now even, the eur/jpy had a huge bullish pin bar off of support on the monthly. Because of that, I went long and am still long. Now that we've moved up without retracing for quite a while, we need a retracement in order to gather force to push upwards again. This week will most likely close as a bearish pin bar and so I think next week will give us a retracement before pushing onwards. If the market were random, I wouldn't be able to think of that and believe that I am right. I would just be wasting my time and money.

If there are probabilities, then there is randomness. Why do probabilities exist? Many different trials with random outcomes... The correct answer to "Is forex random?" is "Yes, to an extent." The extent or randomness should be less than your confidence in the trade.

And to put it bluntly, no crap there are times when forex is not random. I'm not dumb enough to sit here and say that in a 500 pip upmove that it's probably not gonna go up. I'm saying there is always the random factor. There is not anyone here with a 100% record, because that randomness got you. If so, tell me now and I'll be quiet.

This is a complex issue and a good topic.

Thanks for the welcome, but I've been around a little while.

I think LF and HF are actually the same, except 1 min or 5 min(coz the spread).

The random walk theory was disproven a long time ago. It may be chaotic and random in many places, but there's a non-random human element that behaves very predictably.

My vote is yes...markets are random.

It has to be in order for profit to be realizable for me.

Market forecasters still put a disclaimer under their letterhead. "Past results are not indicative of future performance...." you finish the sentence please.
At least "legally", it might be random, because "legally" we can't prove it is not either.

Ironically my approach to profiting from the market is based on the premise that markets are predictable. However everybody has to accept that once the money is on the table, the chances of you taking it back with more is still 50/50 bottom line.


mARK

Random walk theory or efficient market hypothesis still has their worth. As per your statement, both elements are presented evidently.