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Why do indicators not work/work? Why is Forex not truly random?

  • #101
  • Nov 13, 2015 1:27pm Nov 13, 2015 1:27pm
Quoting diceman555
{image} this is market synce and harmony,pink space,unable to be maniplilated
bunch of numbers. what are they?
  • #102
  • Nov 14, 2015 11:26am Nov 14, 2015 11:26am
Quoting ruma29
{quote} bunch of numbers. what are they?
thats for you to figure out
  • #103
  • Nov 14, 2015 4:17pm Nov 14, 2015 4:17pm
From an Auction Market Theory perspective

TA indicators fail because they all use price & linear price to price relationships as a variable to analyze the market, which means there is a basic assumption that all prices are viewed equally.

Unlike AMVT, TA'ists do not view PA as an advertizing mechanism

The problem many market participants have is that they focus too much on price, which is merely the advertising side of the auction process. They demonstrate how price is just a way for the market to seek value. Theres an important distinction. Price is not value.

The Auction Process
The overriding principle behind Auction Market Theory is that all electronically traded markets follow the auction process. We can, of course, extend this principle and say that all transactions that exchange something for something follow the auction process. When you go to the supermarket, you are engaging in the auction process. For example, you go to the freezer section to buy ice cream. You are expecting to pay $3.99 for a half gallon but today you see that there is a sale on ice cream and you can get a half gallon for $3.59. For a split second you wonder why they would put ice cream on sale but you quickly dismiss that thought and put 2 half gallon containers in your shopping cart.

You have just passively participated in an Auction. Maybe the supermarket had too much ice cream; maybe the ice cream was getting close to its expiration date. For whatever reason, the supermarket had to drop the price to a point where it could increase its sales of ice cream. It used price to find a level where it could increase sales. Price became the advertising mechanism for the opportunity for you to buy ice cream. The fluctuation in the price of ice-cream was used to generate feedback.

As is price the advertizing mechanism brokers use to solicit and entice you to facilitate a trade.
Some advertisements are successful and attract new business, while others are unsuccessful, serving to shut down activity. Never the less, Advertisements to generate feedback.

Why would they (drop the price) put ice cream on sale? To look for buyers to increase to volume of ice cream sales. Why does that work? Because consumers know the real value of an item and dropping prices are seen as a Deal. Buying something for less than its actually worth.

Why would a broker start quoting (advertizing) lower prices? Just like the supermarket had to drop the price to a point where it could increase the volume of traders (buyers/sellers) willing to facilitate a trade

Brokers use price quotes to fluctuate among a range of prices to entice many different market participants with many different intents to trade, until enough feedback is generated where perception of value (not price) amongst market participants change, thus changing value.

They are using an advertising mechanism, to make a market. The random fluctuations in the "advertizing mechanism" is not the same thing as the Market being random.The Market is not random, fluctuations in the "advertizing mechanism" are.

From an Auction Market Theory perspective
The price quote/ticker is just an advertizing mechanism. Theres nothing in its movements that describes the longer term condition of the market. A bar chart is just a visual representation of the price quotes/ticker.

On the other hand TA does not see PA as an advertising mechanism.
TA there is an assumption that the "price" being advertised is Fair (value) all prices being created equal.
Therefore a need to chase it. Fixated by PA

Measuring & performing mathematical calculations on the "advertizing mechanism" (Price), is analyzing the movements of the "advertizing mechanism", not the actual value of Market itself.

Just an opinion..
Markets are not efficient, rather they are effective - Jones
  • #104
  • May 20, 2018 4:59pm May 20, 2018 4:59pm
Because the price isn't stationary so indicators can only work over certain intervals.
  • #105
  • May 20, 2018 5:18pm May 20, 2018 5:18pm
Quoting Pipsgeek
Interesting. How do we translate a USD/JPY Resistance/Support to a EURUSD Resistance/Support, though? Purely by looking at the chart or is there a way to calculate it?
I do it by adding EURJPY to the equation
EURJPY(SR)/USDJPY(SR)=EURUSD(SR)
here is a day HiLo translation example
Attached Image (click to enlarge)
Click to Enlarge Name: Capture.PNG Size: 83 KB
Be Water My Friend
  • #106
  • May 21, 2018 1:07am May 21, 2018 1:07am
Quoting unknown4x
Why do indicators not work / work in Forex? Why is Forex not truly random?. I will go into details on why they do not work and at the same time work in forex. This is highly correlated to the fact that forex is a random market but with flaws. Forex in general is a random market. The next outcome cannot be predicted / computed in any mathematical correct way. This does not mean we cannot make assumptions on what the next outcome / price will be with a percentage > 50%. You can view the forex market as a random generator BUT with...
There are many interesting points which you described here which tells us many hidden things about the market.
If we talk about humans beings than yes the fundamental nature of humans beings havent changed since centuries.

The most simple point that has resonated with me however, is that as human nature will never change history is destined to repeat. As markets are essentially made up of human sentiment and emotion, future generations are destined to repeat the behaviour (or cycles) of previous generations. This causes all financial markets to work in cycles which will repeat over and over. By looking at a historical chart of market action, one should then be able to identify the past cycles which have occurred and which will inevitably repeat in the future.

But the biggest problem is that the pattern here which repeats cycles,subcycles etc cannot be spotted by any indicator or trading system.
This not to say that there is no indicator,trading system or ea which does not work or is not profitable that depends on how the trader uses it ofcourse.But there is something more to it which we need to look into.

There is something else going on which many people need to figure out themselves on their own.I have figured this out after extensively studying the prices of various instruments which reveals its hidden structure.

Now lets talk something related to the theory of random numbers as you have said,if anyone generates a series of pseudo random numbers they look completely random but the thing is they are not random because it has been seeded with time.If anyone knew that seed than they can predict each and every number from it Thats the glitch in matrix.

If we look at Pi that is 3.14159265 which continues to go upto infinite numbers [million digits you can see here.] But this digits of Pi has a hidden pattern within itself.
No one ever Discovered anything new by colouring inside the lines.
  • #107
  • Nov 20, 2019 11:47am Nov 20, 2019 11:47am
Indicators don't work. Period. Most retail traders use them and not surprisingly they lose money. What should that tell you about indicators? If they worked, we'd all be rich now, wouldn't we? Regarding randomness - on short-term charts (the ones retail traders love) prices fluctuations are in fact a random walk. Study after study has confirmed this. To believe otherwise is the height of folly and foolishness. "Why is Forex not truly random?" - it IS truly random. Get over it and deal with it. If you can't accept the random nature of the game, then maybe you should put your money in a savings account and leave it there.
  • #108
  • Nov 20, 2019 12:49pm Nov 20, 2019 12:49pm
Quoting gravitist
Indicators don't work. Period. Most retail traders use them and not surprisingly they lose money. What should that tell you about indicators? If they worked, we'd all be rich now, wouldn't we? Regarding randomness - on short-term charts (the ones retail traders love) prices fluctuations are in fact a random walk. Study after study has confirmed this. To believe otherwise is the height of folly and foolishness. "Why is Forex not truly random?" - it IS truly random. Get over it and deal with it. If you can't accept the random nature of the game, then...
That really matters about indicator. It depends what they intended to calculate. I have coded very well working one to predict confluence zones. EA's will fail i can guarantee you due to changing environment of markets. But indicators and semi auto trading. Definitely can work for the trained minds....
It can do anything anytime.. I believe it can be predicted. But no one can predict it with %100 accuracy without being wrong because of many uncontrolled event can accur and no one can control it. It is predictable at the end...
Take it easy.
  • #109
  • Nov 20, 2019 1:00pm Nov 20, 2019 1:00pm
Quoting Quants
{quote} That really matters about indicator. It depends what they intended to calculate. I have coded very well working one to predict confluence zones. EA's will fail i can guarantee you due to changing environment of markets. But indicators and semi auto trading. Definitely can work for the trained minds.... It can do anything anytime.. I believe it can be predicted. But no one can predict it with %100 accuracy without being wrong because of many uncontrolled event can accur and no one can control it. It is predictable at the end...
If you regurarly update EA's still wont work? I want to restart trading, but still did not decide the directions. Few years ago I traded manually, but now I'm thinking to build some EAs.
  • #110
  • Nov 20, 2019 1:04pm Nov 20, 2019 1:04pm
Quoting trendtraderr
{quote} If you regurarly update EA's still wont work? I want to restart trading, but still did not decide the directions. Few years ago I traded manually, but now I'm thinking to build some EAs.
You wont even imagine how far and beyond i went with the Full Automation. I am telling you a big NO. stay away , Run away from any kind of full automation.
It will not work , I can write 1000 reasons why it will not work. Even if you regularly update EA It will not work. Unless you have made it with Super well trained
Machine learning algorithms to keep adapting it self on new conditions and evolving. Big industries are trying to make full automation with money power and well educated people. So your MQL4 EA .. I can say for some kind of period they will work but all of them will give back all they made if u run it just long enough. Continious improvement is a key and it must be made with DATA.
Semi auto is simpler if you know some basics. I suggest you to go with Semi-Auto there is a reason i picked it that way.
Take it easy.
  • #111
  • Nov 20, 2019 1:22pm Nov 20, 2019 1:22pm
Quoting Quants
{quote} You wont even imagine how far and beyond i went with the Full Automation. I am telling you a big NO. stay away , Run away from any kind of full automation. It will not work , I can write 1000 reasons why it will not work. Even if you regularly update EA It will not work. Unless you have made it with Super well trained Machine learning algorithms to keep adapting it self on new conditions and evolving. Big industries are trying to make full automation with money power and well educated people. So your MQL4 EA .. I can say for some kind of...
Well... Thank you. I'll look around and see what changed in the past years. As I said I have no idea yet, where to start again.
  • #112
  • Nov 20, 2019 1:47pm Nov 20, 2019 1:47pm
Amazing this dead thread started many years ago and the originator seems to be missing for 6 years. Probably not trying anymore as account was drained/busted. I could tell by post 1, they were already going to fail. Read it and see the "cannot" attitude.

If you ever see anyone talking about random markets, you know it's only a matter of time before they lose everything invested or quit a little before that. Just like casinos, the markets are not random. Look at how many empires were built by casino owners and financial market makers (brokers.)

Does this mean not random is predictable? If casinos and markets were predictable, they would not exist as the house would go bust. It's called chance, taking a chance. If you know how, you can beat the casinos just like you can beat the market maker. But don't worry, you will not break them as there is plenty of naive money coming in each day to "role the dice."

Markets are random is another excuse for losing. Just because they cannot figure out how the markets operate, they convince themselves the market must be random because they know it has to be. And the brokers love that mindset as they are easy targets to fleece.

Until people humble themselves that they do not know what they do not know, they will never learn what they do not know. And alas, some people have more pride than desire to change the way they think.

Note - If you think markets are random, I thank you for your support.
Ecclesiastes 1:9
  • #113
  • Nov 20, 2019 4:58pm Nov 20, 2019 4:58pm
Price leads Indicators
Indicators DO NOT lead price

Therefore using indicators is plain dumb. So so dumb.

IF you traded the indicator using price as bias then youd make $$$.
  • #114
  • Nov 20, 2019 9:00pm Nov 20, 2019 9:00pm
Here is a random pattern that has occured every day for the last 4 days.

Random natural occurring?
Or manmade?
Attached Image (click to enlarge)
Click to Enlarge Name: USDJPYM30.png Size: 97 KB
Ecclesiastes 1:9
  • #115
  • Nov 21, 2019 7:41am Nov 21, 2019 7:41am
Quoting newbegger
Here is a random pattern that has occured every day for the last 4 days. Random natural occurring? Or manmade? {image}
Were you able to make some profit on this?
  • #116
  • Nov 21, 2019 8:29am Nov 21, 2019 8:29am
Quoting trendtraderr
{quote} Were you able to make some profit on this?
The Yen pairs, I trade during Asia session and this pattern (moving Yen before Tokyo open) is always occurring. Similar to the Frankfort Fakeout (moving the Euro and Pound before the London open.)

I made money on the last 3 days, lost money on Friday as I had misread the direction.
Ecclesiastes 1:9
  • #117
  • Nov 21, 2019 12:59pm Nov 21, 2019 12:59pm
Quoting newbegger
{quote} The Yen pairs, I trade during Asia session and this pattern (moving Yen before Tokyo open) is always occurring. Similar to the Frankfort Fakeout (moving the Euro and Pound before the London open.) I made money on the last 3 days, lost money on Friday as I had misread the direction.
Intresting, I will read more about that. Is there any EA for this?
  • #118
  • Nov 21, 2019 10:52pm Nov 21, 2019 10:52pm
I agree with most here from personal experience that EAs don't work consistently. They go through long spells of losing money primarily because of commissions. I had at least a dozen different trend following EAs, some lost money for years before returning to profitability. I doubt any one will stick with it, Not even the EA itself. I found that the only way of producing consistent results was by thinking and observing what was happening today not 5 years ago. I discovered that even if you tested your EA for the last 5 years, the next 5 years data might look completely different. I concluded sadly after many years that back testing was useless. The future mysteriously always looked less gloomier than the past.
When you see it, BET big.
  • #119
  • Nov 21, 2019 10:59pm Nov 21, 2019 10:59pm
For success you need to take into consideration different things that are not in the data:

-What's the character of today's market? Hot or Cold.

- Is news coming out?

- Previous High and lows

-What time of the day are you in? etc
When you see it, BET big.
  • #120
  • Nov 22, 2019 3:15am Nov 22, 2019 3:15am
Plot out the whole numbers on a chart and then tell me again that price is random
?
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