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Why are currencies more random than other instruments?

  • #21
  • Edited 7:41pm Aug 12, 2017 7:15pm | Edited 7:41pm
Quoting trickshady
I think they are random because they seem to happen very suddenly for no obvious reason. Now that few people have mentioned about manipulation maybe these random moves are pure manipulation. I have also not seen that kind of activity with such an incredible frequency in other markets. My explanation for these spikes is because of random orders that come into the market with the purpose of acquiring certain currency for non speculative purposes. Isn't forex used the least as an investment instrument because most trading institutions don't bother...
"with the purpose of acquiring certain currency for non speculative purposes" ... not everyone stares at charts looking for levels to bounce or break through.
Staying in my lane...
  • #22
  • Aug 14, 2017 7:49am Aug 14, 2017 7:49am
Quoting trickshady
I think they are random because they seem to happen very suddenly for no obvious reason. Now that few people have mentioned about manipulation maybe these random moves are pure manipulation. I have also not seen that kind of activity with such an incredible frequency in other markets. My explanation for these spikes is because of random orders that come into the market with the purpose of acquiring certain currency for non speculative purposes. Isn't forex used the least as an investment instrument because most trading institutions don't bother...
I agree with this. Like you said, in the stock market and other markets, stocks are not typically purchased in the normal course of business as a hedge. They are generally purchased for investment and speculation. The FX market is so much larger than these other markets and there are many more reasons for purchases including hedging, which comprises a large amount of transactions. Therefore, this can cause price to be more erratic in behavior since there are many more players buying for many more different reasons.
  • #23
  • Aug 14, 2017 10:53am Aug 14, 2017 10:53am
Mark the spikes day/time and see if they are caused by news.. very easy

ALSO, the lower the time frame the more "chaotic" the price action looks because the big players can move the price a few pips easily up or down to suit their agenda wich its to hit obvius stop loss levels (noob traders) to create liquidity for their own trades, plain and simple

oh.. and that happens EVERYWHERE not only forex
  • #24
  • Aug 14, 2017 1:02pm Aug 14, 2017 1:02pm
Quoting trickshady
I have been observing currencies, stocks, indices, commodities and cryptocurrencies and I find currencies to be more random than any other instrument. Am I wrong or is this true and why?
Because more traders participate to the trading, i.e. the "weight" of each trader declines (even its a big bank) so its subject to normal distribution, where at any point it can move up or down with equal odds. Though it doesn't applicable to macro trends, that's why pro traders always work on high timeframes because there are some calculable Risk-Reward changes that move the crowd from one place to another.
  • #25
  • Aug 14, 2017 1:17pm Aug 14, 2017 1:17pm
What if btc become global currency ? This volume will end ?
  • #26
  • Aug 14, 2017 8:08pm Aug 14, 2017 8:08pm
If bitcoin becomes a standard and global currency then right now it's dirt cheap. In this case it will reach $100k+ per bitcoin lol.
  • #27
  • Aug 15, 2017 3:48am Aug 15, 2017 3:48am
I will say this once. I know brokers and some funds.

The actual price in FX can be re-package with few pips of spread to cover cost of the funds. YES, it can be done.

The 'price' you see in MT4 may not be the real price but not too far from real price.
The future depends on what we do in the present.
  • #28
  • Aug 15, 2017 1:43pm Aug 15, 2017 1:43pm
Frankly speaking, I am not sure what you meant. But, to level what I understood, I believe you meant about Currency pairs being more stable with moving up and down without reason. If yes then I believe it’s because there are more picker for it than Commodities, Indices or other stuff, so that’s why it’s so much more random. But as I said I am not sure if you are asking this or not.
  • #29
  • Last Post: Aug 16, 2017 5:19pm Aug 16, 2017 5:19pm
Quoting trickshady
I have been observing currencies, stocks, indices, commodities and cryptocurrencies and I find currencies to be more random than any other instrument. Am I wrong or is this true and why?
Quoting trickshady
I never said forex was random, I don't believe it is. I just feel like there is more randomness in it than other markets.
Quoting trickshady
{quote} Yes that's exactly what I mean. They spike like crazy all the time. Way more often than any other market I have observed.
Quoting trickshady
I think they are random because they seem to happen very suddenly for no obvious reason. Now that few people have mentioned about manipulation maybe these random moves are pure manipulation. I have also not seen that kind of activity with such an incredible frequency in other markets. My explanation for these spikes is because of random orders that come into the market with the purpose of acquiring certain currency for non speculative purposes. Isn't forex used the least as an investment instrument because most trading institutions don't bother...
Ok please don't take offence but I really felt the need to pull out a handful of your posts to serve as an example to yourself and others. In all the above quoted posts you are discussing a hypothesis that is if the market is random or not however, neither your self or any of the other posters use a statistical/quantitative perspective that could be employed to take all the mystery out of your question and provide you with a statistically significant answer.

You can indeed distinguish a random chart from a non-random chart by using anyone of the 20+ tests that allow you to test the random walk null hypothesis. My favourite an automatic portmanteau test for serial correlation.
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