Proof That Forex is Random video

Another proponent of EMH....... (sigh). Rest assured that I've heard (and read) it all before, and also from many frustrated skeptics. You can believe that profits made by the likes of Buffett, Tudor Jones, Thorp, Simons, Dalio, et al have merely been fortuitous, if it makes you feel better. And that the institutions are wasting money paying the salaries of their analysts, economists, etc when they could simply toss a coin...... or you could choose to consider the implications of material like this and this.

Anyway, regardless of whether TA can be used profitably or not, the video presenter's main arguments are grounded in logical fallacies (which I explained fully in the link I gave. Philosophy 101 ). The material in the video neither proves nor disproves anything, other than the fact that the presenter himself admits that he is unprofitable. It's a case of a failed trader believing that his subject knowledge is superior to those who've been consistently successful for several years.

what is the point to understand whether the market random or not?

I mean look at this chart. Its a random generated charts. No pro trader would no the difference. It interesting. That's the point. Looking at this chart you could say price hit support and bounced back up.

I really enjoy yours posts my friend. Your honest and enlightened.

How come you have guys on this forum that have posted threads claiming to make 30-40 pips daily for several years and they still post in the threads.

CHOROS System for example thread. He makes 3 percent per day and still does he is trading 20 lots sizes he says.Claim being the key word.This is one example. Would love your feedback. Why would someone lie for several years ?

yes, random, perhaps, or perhaps not as much as you think. Humans are not random, they all have daily routines and life patterns, which do show up on the markets. All very predictable. I predict after you wake up, you have a coffee, a shower, check your charts and prepare for another day of trading. I predict you do that 4 or 5 days a week. A very regular pattern. you may be even more predictable, you dont trade mondays or fridays due to some rules you have created.
my point is, humans are very predictable. and that can be traded and that is our job as traders to figure out how that can be traded.

The following is my beliefs from extensive study of the markets for the past 2 years. Yes I am pretty new, but a fast learner.


I believe:
The key to profitability is to recognize those "human" patterns in the market and learn how they can be traded.

I am not talking about advanced patterns, named after creatures, but just simple wave patterns. I believe that this is the foundation all traders much learn to be successful. Then build on that framework.

I believe a person can trade most systems with some level of success if you understand the fundamentals of wave patterns. A good starting place, after working through the whole babypips site, is to read all you can find on Elliot wave theory. But don't get lost there. It's not the end all be all, but just a first step.

A problem I see with hardcore Elliot wavers and the theory is no one can agree on what a wave is. This is my current work; is to figure that out and test it.

Been there and done that; Forget about support and resistance, it doesn't exist. It's a myth. What you see are areas where humans find prices which they think are fair market value, they agree to buy and sell. but it's not a line on the chart. not a horizontal line, it might be more of a trend line or channel. It's the price action that began as an emotional response among traders.

If you take the basics away from that, and apply it, and learn to recognize strengths and weakness in the markets as indicated by the price action and waves, you and do away with all indicators and then you can build and trade a basic simple system with decent success. I have a working model that works well on stocks and ETF's but not great in forex. more work to be done.

That's where I am at now, and it has changed my trading greatly from a consistently losing trading to breakeven to slightly profitable. I have only been trading for 2 years so I still have a lot of work ahead of me. But this for me seems to make the most sense. And to some degree has tested out to be true for me.

As for random, not as much as you might think because humans are not random by nature. And the market is made up of humans and human emotions. If you think it's random, you need to take a step back, trade higher time frames, try weekly/daily to reduce all the noise of lower time frames. the lower the time frame, the more random. try trading daily and weekly charts with much smaller positions, and like me, I am sure you will discover, it's not all that random. you will start to see patterns, and learn that they are in fact very predictable and tradable, somewhere around 70%-80%.
Why am I not much more profitable. Well because like all humans, I make stupid errors based on emotions and non-sense. That's all on me. I am working on that.


live long and prosper.

70 percent of forex trades are done by bots in 2017. Not humans.

The markets are fractals

There is no noise on lower timeframes,your copy and pasting information you have learned from the forums

I guess you don't have ninja platform

Put a 5 second chart of any pair

Compare it to the daily chart

They look the same. Its the geometry of the market.It a wave within a wave ETC. Study bill williams (trader) chaos theory.

Trading costs is what stops trading lower timeframes.

99.8% of Hedge Funds Lose Money

here is link
https://agoraeconomics.com/2016/09/0...ds-lose-money/

The odds are not in your favour as the stats suggest above. Statistically there are more lottery winners than forex millionaires (at retail level)

A good education with a high pay job investing in stocks long term and getting dividends is a high approach to wealth as the stats will suggest this is highly likely.

Very simply, if price movement is a totally random walk (as the presenter of the video in post #1 is trying to suggest)....... then ultimately ALL profit and loss is pure luck, and ALL trading strategies (including yours and mine) will eventually lose, if traded for long enough, due to br0ker costs. There is no skill or knowledge in trading, and your trade explorers prove nothing except that you've been luckier than everybody else. The hedge fund billionaires are the lucky few, just the same as there are a few lucky lottery winners. We are all wasting our time here, discussing concepts and strategies, because in the end nothing matters except luck.

Conversely, if there are occasional biases in the way that price moves, then it is possible to be systematically profitable, by exploiting these biases using superior analysis, knowledge and skill.

So which school of thought do you support? Are your trading results the result of mere luck, or does your knowledge and experience have an effect on your performance?

Google "efficient market hypothesis" for more information.
_________________________________

One possible answer: because he has an ego that wants to impress others. (Just like guys like to boast idly about their sexual prowess. Sex and money: the two biggies that people like to boast about ). Or perhaps he has other motives that we don't know about.

Anyway, no offense, but you're committing a similar logical fallacy to the video presenter's. Just because one guy in the Choros thread might be deceitful or unprofitable, it doesn't prove that the markets are random, or that EVERY trader in the world will eventually lose, when their luck eventually runs out. Another possible explanation (for example) might be that the Choros strategy simply lacks an edge.

"No pro trader would know the difference" -- that's another generalization that can't be proved, unless you personally know every "pro trader" that's ever lived. I'm definitely NOT a pro trader, but I can easily tell the difference between real and RNG-created charts, if I have enough data. Just look for spikes caused by high impact news (e.g. NFP at the same time every month), gap patterns every fifth day following a weekend, and some of the other items I listed in myth #22 here.

I'm not trying to be an argumentative troll; just trying to (and hopefully not too condescendingly) point out how/why people's logic is flawed, or how logic that's too simplistic causes them to jump to unprovable or unsubstantiated conclusions.

Nice rant. Good post

The markets can be beaten. Just read market wizards.

I mean Jim rogers trades his own account. He is technically a retail trader,he said he never met a rich technical trader ever.But the regular guy has almost no chance to get wealthy from this.

My notion on this thread is random charts look damm close to real market charts. I'm no expert.

Agree totally about the limitations of TA, and about the extremely high failure rate of "regular guys". In terms of analysis -- whether TA, FA, whatever -- if you want to survive long term in this game, I believe you must somehow find the right balance between being systematic, but also adaptable enough to respond to changing market conditions. (From what I've read, many strategies that were profitable during the 1990s have lost much, if not all, of their effectiveness today). Finding concepts robust enough to stand the test of time is not necessarily easy. Or at least it hasn't been easy for me.

Back in August I paid to attend a workshop presented by a trader with 25+ years institutional experience. He used some techniques that I've never encountered before, and wouldn't have thought of myself in a million years. Some of this involved FA, orderflow/liquidity analytics, and intermarket relationships and dependencies. Charts can appear highly random, but I learned that there are ways of knowing some of what's going on behind the scenes. But certainly not by using the 'systems' that are discussed on trading forums.

I certainly don't claim to be an expert, I merely post my opinions, right or wrong, just like everybody else. I do try to use math and logic wherever possible.

Your are right Sir i agree with you 100 % ...

I don't care if people think it's random or not as long as you can make money from it.

Retail traders who use indicators = random results every time
Professional traders = lucky? skilled? randomly landing in the thin tail of positive returns?

I believe the proliferation of MT4 users and the copycat platforms have all contributed to the net loss of retail FX. I have never met a long term profitable trader who uses moving averages, RSI or whatever canned indicator MT4 wants to give you (for free). So everyone is doing the same thing and everyone is losing. Lemmings.

The day people realise that there are other ways of viewing the market is the day their results start changing from most here.

People who think they are super smart and fail as traders have to try and find a reason for that failure, hence this video and articles you see occasionally online. They just cannot accept that being super smart isn't necessarily a prerequisite for trading success.

It always makes me chuckle when I look at my results and compare to these theories in videos etc like this - no correlation with randomness at all.

I have scanned all majors for the last 8 yrs. And I have a proof nothing is random. Results are exactly the same on all pairs. At a fast pair like Gold, the ratio is 18:6, for example, on a slow pair like AUDUSD, same thing is 6:2. The proportion is 3:1 at both pairs, for example. 3:1 is also on all other pairs.

There are far more stunning examples than that one. The results are simply schocking. There is not a single piece of randomness in here... The guy on the video is utterly confused...

Im trade full time trader but i'm an investor in long term stocks.

Its great to hear successful people like this yorkshire lad,i'm from England too.

This is a post from a troubled trader

~Here is my input for what its worth. I have 8+ years of
experience, with the last 4 years traded full time, devoting up to 10+ hours a
day to direct market participation. I am an educated (fool), mature adult with
a degree in mathematics from a Russell Group university and more than a decadeof programming experience, and i consider myself to be
“sophisticated” (or stupid) enough to be involved in OTC markets. I
have traded every possible combination of technical analysis, timeframe,
fundamentals, with many brokers, ECN’s, MM’s and spread bet platforms, manually and with automation. I have put the best and most (un) productive years of my life into beating the FX markets. To cut a long story short, i have been around the block at least once and have the hairline to prove it.
When considering the FX market and the potential for
manipulation, a “white lie” PR sound bite often used to muddy the
waters is that the FX markets are just too large to manipulate, with ~$4 bln
traded every day. Sounds HUGE right? But as with any confidence trick, its a
thing of scale; when you break that amount down into all the different markets,
and break down the day into hours, minutes and seconds it turns out that only
~$2mil per second of flow is required to move the most liquid pair, EUR/USD, at
the busiest times – and for the less liquid pairs the sums required to move a
market are pitiful. What is a 2mil lot worth to a MM? Well, many retail traders
trade with 1 mil lots using leverage… so the answer is, that to a MM, it’s
not worth a lot.
The stone cold truth is that if you place stops near the
market they will be hit the overwhelming majority of times, and yes, they are
specifically targeted, and yes, its easy to do…just ask anyone with market
making experience. And more to the point, if the MM was not legally allowed to
do it, they would go out of business in a month. As a retail investor, your
soul purpose as a short-term participant in the OTC market is to feed the MM’s
book so they can lay off the prices at a future date, in layman’s terms – you
are the fool at the table. This function is not of the (misunderstood) kind
where you place a trade and a institution or another investor takes the other
side immediately, and its everyman for himself from that point… your function
is that you implicitly expand the MM’s profit margin so they can take the
bigger hits in the future from professionals who they are obliged to cater for.
This can happen over minutes, days or weeks. Having a “neutral book”
is a misunderstood and an outrageously subjective concept; a MM can move a
market some distance and still remain completely neutral within the constraints
of their business model.
YOU provide “liquidity” to the market by putting
it in the MM’s P&L margin, not by putting it in the spot market…99% of
retail flows don’t get anywhere near the spot market, the real business is done
on private platforms between extremely privileged institutional traders who
“talk to each other”. That’s why you are offered and encouraged to
use leverage (in most cases the option of trading without leverage does not
even exist! Why would it, that defeats the purpose!, the ordinary sums in your
bank account just wouldnt do the job sufficiently). Here is the long and short of
it; it’s not in the interests of central banks that market makers and liquidity
providers should face difficulties, especially not from retail investors.
Hence, they have all kinds of distinct privileges awarded to them to skew each
and every outcome in their favour, this includes being allowed to move the
market…and ripping off Mr retail is their bread and butter. Ask your market maker to show you the contract they entered with the central bank and regulatory bodies of their given jurisdictions.
Also, don’t be fooled by the smokescreen of anonymity
offered through ECN’s either. If you dig deep into the legal, you will see that
all ECN’ providers have a clause that lets them share “any individuals
data” with their liquidity providers. Just think about that for a second.
Here is a word-for-word snapshot of the legal from a Swiss broker;
“Dukascopy Europe is entitled to transfer all personal
data of the client, transaction records and all other information submitted by
the client or otherwise obtained during the course of the business
relationship, to its affiliates or counterparties, in order to facilitate the
consumption of, and to discharge its obligations under this
agreement.” So, im no lawyer, but
i think we can all agree here that the premise of anonymity is a bit of a joke…
that’s why this particular company, though Swiss, is legally based in Latvia
where trade description requirements are easily skirted.
The whole industry; analysts, technical analysts, brokers,
gurus, commentators, journalists, software developers etc…unwittingly It all feeds off convincing people they too can have a comfortable life as an FX trader.
Trying
to live as an independent FX trader is probably by far the stupidest thing an
individual could consider, it borders on suicide…something many of us consider
frequently. Scratch the surface enough, and you will find a lot of
troubled individuals, who have been wrecked by a period of foolish desire to
get something for nothing. Only to find they get a lot of nothing for just
about everything they could give. Beware folks, trading can destroy you, turn
you into a bitter and joyless individual and teach you a very cruel
lesson…those with the money intend on keeping it, and yours. Don’t say you
haven’t been warned, the biggest mistake of my life was assuming I was smart
enough for the job, when smarts really didn’t matter. The day trading(scalps,
swings, noise) game is rigged.~

So don't day trade. I have never met a profitable day trader anyway (long term). Most profitable private traders in my experience trade over many days if not weeks. The MM and prop traders don't trade that time frame so there is very little competition. Your profits are larger so your costs don't come close to being a consideration. It's a no brainer for me.

How different are these professional institutional traders who trade opm from the average joe retail trader ?

https://agoraeconomics.com/2016/09/0...ds-lose-money/

i think this article needs a bit of colour..

there has been an enormous increase in the number of 'hedge funds' over the last decade or so, and they are overwhelmingly poor. People just love to call themselves a hedge fund and go out and charge 2/20.
The 'true' guys are offended by this as there are a number that are genuinely very very good and do actually justify the fees.
More recently there has been a significant move away from even the better hedge funds. The AUM in total has declined significantly in the last year or so and is set to get hit again this quarter.

(please dont ask how i know this stuff, i just do)

and as to the post earlier re a 'troubled trader'.

well. it is just wrong.
Can a market maker move the market around/?.. gee, maybe, just maybe, something like usdzar, and not very far. In everything else?.. not a chance.

they have 'distinct privileges awarded to them'?... good heavens... thats nonsense..

there is one contentious area where the market maker may have a market advantage. That is on receiving a very very large order from a customer.There was a time when that order would be exploited. But not anymore , as the conviction of the HSBC head of foreign exchange will attest

With all due respect, you are being duplicitous.
Stop hunts are a fact on any daily chart (and are usual behavior at the London open in particular). This is free money, of course. One can debate whether a market maker is able to solely hunt stops, but I’d think that the incentive would give them reasons to act in a correlated manner.
To go back to the subject of the thread, stop hunt is one of the “non-random” elements in the market.
Cheers,
k

im not sure duplicitous is entirely fair. The point i was try to make was the market makers are unable to march the price around to suit their needs, but rather the market will naturally gravitate to its weaker side. but maybe im splitting hairs here so yes, back to the thread.
And yes, i agree it is one of the market imperfections as is any outsized order that distorts the price etc etc.