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Forex is random

  • #21
  • Mar 25, 2020 2:08pm Mar 25, 2020 2:08pm
After extended testing I conclude that the market is not random. When you run the random chart generator for long enough, you realize that the price converges to the initial price whereas in real life the fluctuations are much wider than a random walk will suggest. However I also conclusively found that there are no patterns of price movement. Sweet spot, consolidation exist only for those who believe in them. But it shows conclusively the existence of wider movements in the real data than the randomly generated one.
When you see it, BET big.
  • #22
  • Mar 25, 2020 2:29pm Mar 25, 2020 2:29pm
There is no way to fully prove whether the market is random or not, but you can predict the randomness, it might not be what causes the move but it can be predicted, hence traders make money - Anyways interesting post!
  • #23
  • Mar 25, 2020 2:42pm Mar 25, 2020 2:42pm
Quoting W1llbam
There is no way to fully prove whether the market is random or not, but you can predict the randomness, it might not be what causes the move but it can be predicted, hence traders make money - Anyways interesting post!
There is a way. Like I said above. The real data shows way more fluctuations than the randomly generated data. The problem is even if trends do exist. Profiting from them might be an entire question to answer. I have just answered the first, i.e the market is not random.
When you see it, BET big.
  • #24
  • Mar 25, 2020 3:57pm Mar 25, 2020 3:57pm
The market is random, but even in chaos there are pools of order. It's called the 5th wave after a strong 3rd wave interrupted by a flattish or narrow 4th wave.
  • #25
  • Mar 25, 2020 3:57pm Mar 25, 2020 3:57pm
Quoting Rennaissance
{quote} There is a way. Like I said above. The real data shows way more fluctuations than the randomly generated data. The problem is even if trends do exist. Profiting from them might be an entire question to answer. I have just answered the first, i.e the market is not random.
I have come to a conclusion that markets are a Random Walk with occasional Levy Flight, that is, random movement with occasional rapid ascends or desends.
Now I am no mathematician, but for me, it all just seems to fit https://en.wikipedia.org/wiki/L%C3%A9vy_flight
  • #26
  • Mar 25, 2020 4:11pm Mar 25, 2020 4:11pm
Forex is not random, even though robots are involved, majority of moves are still done by humans. And humans are predictable...psychology is probably the most important aspect of trading. Not only towards yourself(discipline, sticking to rules, no revenge trading), but also predicting what others will do. Its for people who love numbers and psychology at the same time.
Everyone can see the chart, but only a few can actually read it.
  • #27
  • Mar 25, 2020 4:28pm Mar 25, 2020 4:28pm
Quoting rover99x
{quote} I have come to a conclusion that markets are a Random Walk with occasional Levy Flight, that is, random movement with occasional rapid ascends or desends.
That's exactly where nearly all of my profits are from. These rapid ascends or descends as you call them involve a strong 3rd wave interrupted by a brief, flat 4th wave, before resuming with a 5th wave. It happens over and over but the trick is to recognize a genuine move like that.
  • #28
  • Mar 25, 2020 4:31pm Mar 25, 2020 4:31pm
It doesn’t matter if it’s random or not.
  • #29
  • Mar 25, 2020 4:37pm Mar 25, 2020 4:37pm
Quoting lddd
It doesn’t matter if it’s random or not.
Actually it matters very much.

We need the markets to be nearly 100% random from any one vantage point of view, otherwise none of us will make any money - the act of taking it from someone whose interpretation of the market at the time is wrong.
  • #30
  • Mar 25, 2020 5:26pm Mar 25, 2020 5:26pm
I'm not trading atm, too busy with reality covid issues. I think forex success is purely from money management success. At any time there are too many variables in play to have more than an "edge". My biggest failure with Forex is my inability to maintain consistent trades, inevitably I go big and go bust.
  • #31
  • Mar 25, 2020 6:07pm Mar 25, 2020 6:07pm
Quoting raklian
{quote} That's exactly where nearly all of my profits are from. These rapid ascends or descends as you call them involve a strong 3rd wave interrupted by a brief, flat 4th wave, before resuming with a 5th wave. It happens over and over but the trick is to recognize a genuine move like that.
Yep spot on, I'm not an advocate of Elliot Waves but it certainly is a great framework to base trades on!
  • #32
  • Mar 25, 2020 7:20pm Mar 25, 2020 7:20pm
Quoting OutThere
Oh, I get it. This is a 'fundamentalist trader' conundrum. You hear in the news that for example interest rates went up and you consult your economics text book and decide to buy/sell based on where the price SHOULD go. But, then it misbehaves and does the opposite. Something like that? If you try to go 100% technical and avoid the news as much as possible, then you are almost looking at a random chart because you will have no idea what is supposed to be influencing the market and you won't have to be surprised that it didn't. If you can't trade...
If you think you can trade a random chart profitably, then you dont really understand what a random chart means. In a random chart the probability of a 3x move is 25%. Its not about the up and down moves only, it's about the probability of such a move occurring.
When you see it, BET big.
  • #33
  • Mar 25, 2020 7:47pm Mar 25, 2020 7:47pm
The key is how to unravel the data to find meaning out of the chaos. I believe price action is soo choppy, it makes it hard for us to capture those moves.
When you see it, BET big.
  • #34
  • Mar 25, 2020 10:20pm Mar 25, 2020 10:20pm
Wow, theres a lot of post editing going on.
This thread changes everytime you click refresh. People are a bit touchy.
Im outa here.
Why is a Raven like a Writing Desk?
  • #35
  • Mar 26, 2020 1:19am Mar 26, 2020 1:19am
Quoting Rennaissance
Just look at the two images attached below. Looks exactly like the real charts. {image} {image}
These are examples of nothing. do you have examples that trading is random?
  • #36
  • Mar 26, 2020 6:18am Mar 26, 2020 6:18am
Its not random at all. There is reason behind each and every move, but not everyone is able to get it.
  • #37
  • Mar 26, 2020 8:05am Mar 26, 2020 8:05am
Quoting tim12
Its not random at all. There is reason behind each and every move, but not everyone is able to get it.
The market is random but with Levy Flight, Levy Flight is something we see all around and in nature. But of course it doesn't really matter what you believe, trade your method with what you see on the screen!

One little note on randomness, it is not, up down, up down, up down, it's up up, down, up up up up up up, down down down, up up up up up up up up up, down down down down, up up! You get trends in random events.....
Try it, toss a coin 100 times and you'll get a series of heads or tails, sometimes as many as 11 heads or tails in a row! I tell you, it surprised me when I tried it.......
  • #38
  • Mar 27, 2020 12:52am Mar 27, 2020 12:52am
Quoting rover99x
{quote} The market is random but with Levy Flight, Levy Flight is something we see all around and in nature. But of course it doesn't really matter what you believe, trade your method with what you see on the screen! One little note on randomness, it is not, up down, up down, up down, it's up up, down, up up up up up up, down down down, up up up up up up up up up, down down down down, up up! You get trends in random events..... Try it, toss a coin 100 times and you'll get a series of heads or tails, sometimes as many as 11 heads or tails in a row!...
I m going to regrettably repeat myself again here. In a random data there are no trends. 11 heads or tail is not a trend, because there is no bias in a random data. You cannot make a penny in the long haul , because the probability of such a move will be about 8.33%. Unless you find a non random behavior in the real charts, you are doomed to failure. I believe there are inefficiencies, I just think it's very hard to find them.
When you see it, BET big.
  • #39
  • Mar 27, 2020 1:58am Mar 27, 2020 1:58am
Quoting Rennaissance
{quote} ... In a random data there are no trends. 11 heads or tail is not a trend, because there is no bias in a random data...
It seems that you have the wrong definition of trend. Trend is simply a move from point A to point B. 11 heads or tails IS A TREND. As long as there is movement , there are trends.
As long as price moves from point A to point B, you can capture some pips during the move.
  • #40
  • Mar 27, 2020 2:59am Mar 27, 2020 2:59am
In what sense is forex being called random here?
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