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  • #161
  • Dec 18, 2006 9:52am Dec 18, 2006 9:52am
Right! What have I been saying from the start? there will be a flood of reatail traders, the market will become more and more technical. Fundamentals become obsolete and from that point nobody knows what will actully happen............. That is what I have been saying from the start.

Technicals will overtake the market and from that point nobody knows what will happen it is highly likely that this market will be shut down for reatail traders. Or the leverage might be limited I never said this wont happen I never speculated as to what would happen after that point.

You basically just agreed with me....
  • #162
  • Dec 18, 2006 10:14am Dec 18, 2006 10:14am
Nothing is no more radom than:

One Man's Junk is Another Man's Treasure. Thats my deff to Forex.

Nothing personal but it kills me when I get an IM asking when does the JPY session open if you don't even know when the session starts you should deff not be placing a trade... Good thing forex isn't life and death... cause its shocking how many jump in the driver seat and go... but then agin this was created by the retail firms (bucket shops) offering you demo accounts to turn your brain into butter.
  • #163
  • Edited 10:56am Dec 18, 2006 10:43am | Edited 10:56am
Quoting raistin
With increasing number of speculators, amount of money wont increase. From that I conclude that leverage will be lesser and lesser.
No, the overall number of retail speculators won't increase because 95% fail utterly already during their first year and leave the market again. Many TA novices fail, many TA newcomers join. A never ending cycle like in the MLM business which doesn't grow either.
  • #164
  • Dec 18, 2006 11:52am Dec 18, 2006 11:52am
That isn't right oin my opinion man.

People joing the market has grow 500% this year

so for arguments sake lets say last year 100 people joined 5% stayed that is 5 peopl this year 500 joined 5% stayed that is 25 people.

Multiply that by thousands and you will have a more accurate number.

Plus now Forex is being advertised on T.V, Radio and just abotu everytwhere you turn on the internet. This marke wille xpirance tremendous growth in the next 10 years. Growth into the millions it will be more populour than the stock market because of the low startup capital and the high leverage.
  • #165
  • Dec 18, 2006 12:22pm Dec 18, 2006 12:22pm
Quoting Tony Wonder
Growth into the millions ...
That's the same kind of hype like with MLM. Why can it grow into the millions when the same millions fail and give up at exactly the same time?

Why do 95% fail when TA is so great???
  • #166
  • Dec 18, 2006 12:53pm Dec 18, 2006 12:53pm
Quoting Geldschlucker
No, the overall number of retail speculators won't increase because 95% fail utterly already during their first year and leave the market again. Many TA novices fail, many TA newcomers join. A never ending cycle like in the MLM business which doesn't grow either.
I know that man, I was just trying to contradict what Tony said. Thanks for your contribution anyway-)
  • #167
  • Dec 18, 2006 7:00pm Dec 18, 2006 7:00pm
i dont know about you guys, but without internet and current technology, i would never have gotten into forex trading, probably same with herds of other retail traders.

It is becoming more accessible to everybody, and i believe there are still many more who is still yet to give forex a try. Even if 95% of new comers fail and leave, there is still the 5% that stays which adds to crowd.

The argument above regarding fundamental and technical, it appears to me that you are arguing over two different things.

Raistin seems to be talking about long term movements while TonyWonder seems to be talking about shorter term reactions.

I certainly believe shorter term market fluctuations are significantly influenced by technicals. Fibs can sometimes be amazing but applying it is a pain in the ass. Even simple trendlines can sometimes be amazing, and I only ever use 2 or 3 on the hourly chart.

Just my 2 cents from watching the forex markets specifically for a year or so. My trades usually dont last more than a day so fundamentals dont mean very much to me. I also dislike the complexity of it compared to simple TA that tells me when to get in and when to get out.

I see potential in significantly multiplying one's account in one year with very small % risk using TA, I have yet to see a fundamentalist's results over the long term.

Whatever that floats your boat really.
  • #168
  • Dec 18, 2006 7:16pm Dec 18, 2006 7:16pm
Quoting Geldschlucker
That's the same kind of hype like with MLM. Why can it grow into the millions when the same millions fail and give up at exactly the same time?

Why do 95% fail when TA is so great???
You are not getting it the 5% that succeed compounded over the next 10 year will probably be millions of people.

Those people fail because they do not manage their money, they do not use fundamental analysis and they do not know how to use tech analysis.

That 5% will become millions of people man, Forex is growing exponentially.

There are 3000x the people now that there were 20 years ago.


Raistin

You didn't contradict what i said you agreed with it, you said when fundamental analysis starts losing its power retail traders will be culled or leverage will be made smaller. Thats what I have been saying all along........


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  • #169
  • Dec 19, 2006 5:22am Dec 19, 2006 5:22am
lol not really but yeh wahtever
  • #170
  • Edited Dec 20, 2006 8:10am Dec 19, 2006 9:23am | Edited Dec 20, 2006 8:10am
For those who think technical analysis just started working in recent years and only because so many use it. Look at the following chart (if it comes through clearly enough with this stinkin 600x600 res). Note the timeframe and market.

Oh and for anyone having trouble reading the print. It is a weekly chart of the Dow from the historic drop in 1929 to 1932 and the bounce up in 1937. 61.8% fib retracement drawn from the intermediate bouce comes in at 199.24. Two fib projections off the bottom come in at 197.31 (361.8%) and 196.70 (161.8%). So these form a fib zone of 199.24, 197.31 and 196.70 and the high in 1937 is 195.60 Notice how the 1937 top lines up with the 1929 bottom at the bottom of wave3 which also adds confidence these levels would work.

Fib numbers and elliott waves were there before anyone discovered them. Now that the crowd uses them, does give it a self-fulfilling aspect. But there are always the ones who try to fade what the majority believe also.

Fundamental analysis will never go away but its use is definitely limited to the inital release reaction and then long-term.
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  • #171
  • Dec 22, 2006 5:19am Dec 22, 2006 5:19am
Victor Niederhoffer wrote an interest in article about this. Although he used the S&P 500 as the example it would equally aply to FX IMO.

http://www.dailyspeculations.com/vic/momentum.html
  • #172
  • Oct 29, 2009 11:31am Oct 29, 2009 11:31am
This theory is presented in almost every finance class as a testament to the efficient market theory. Yet as professors and professionals parade around claiming there is no sense in predicting the direction of the market but only the probability, they seem to miss a key factor; markets and coins, while they may paint similar pictures on a chart, are very different. Coins do not accumulate and distribute positions therefore creating levels of support and resistance, this is the essence of technical analysis that the greatest traders in history have used to make their fortunes. Perhaps people should stop being so worried about what their super-ema.rsi.macd.mega-oscillator says and begin paying more attention to the accumulation and distribution of the market. Perhaps then it would stop looking like a coin toss?
  • #173
  • Oct 29, 2009 11:41am Oct 29, 2009 11:41am
Quoting daytrader44
This theory is presented in almost every finance class as a testament to the efficient market theory....

Correct, judging buyers / sellers is the way to go.

The market doesn't look like a coin toss that would look like a pretty much straight wibbly line, with generally ( depending on the coin ) a slight advantage towards the Heads side due to more mass landing down so a slight trend caused by that.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #174
  • Oct 29, 2009 4:25pm Oct 29, 2009 4:25pm
Quoting Turveyd
Correct, judging buyers / sellers is the way to go.

The market doesn't look like a coin toss that would look like a pretty much straight wibbly line, with generally ( depending on the coin ) a slight advantage towards the Heads side due to more mass landing down so a slight trend caused by that.
Spoken like someone who didn't bother to run the experiment. There can be trends and patterns in random events and, for the record, electronically simulated coins don't have mass imbalances.
  • #175
  • Oct 30, 2009 1:04am Oct 30, 2009 1:04am
Quote
"So, what you're getting at here is that those same patterns we see in charts that traders use to base trading decisions on, can be reproduced at random and there is no underlying meaning to these patterns?"

That is 100%, without a doubt, absolutely the point I'm trying to make.

I don't agree with this. It is to be expected that a charted random input, like a coin flip, will have sections that match charting patterns. There is nothing surprising about this. In the fullness of time, that is an infinite number of trials, every last imaginable pattern will be present.

The important question is whether a given pattern will appear as often with a completely random input as it does in market history. And more relevantly, whether the distribution of charts after a particular pattern appears in the markets, match the same frequency as the distribution of charts when that pattern comes up from charting a coin flip. For instance, a number of discretionary breakout traders look for pennants. They reason that the market has come to a place where it must fall out of balance, and when it does there is a higher than expected probability that it will continue in one direction. Five straight up moves, with a 50/50 random input, will happen once in thirty two trials. Does a breakout of a pennant have the same probability of a strong move in one direction, or does it have a higher probability? Curtis Arnold's answer to the question, in Pattern Probability Strategy, is that pennants in the market have a higher probability. That one set of random inputs looked like a head and shoulders pattern doesn't tell us anything.

If some charting patterns appear more often than their expected frequency, then that suggests that they do have some "underlying meaning".
  • #176
  • Mar 21, 2011 10:08pm Mar 21, 2011 10:08pm
mark here!
Quoting miscon777
Wow... what a great bunch of silliness we have here... seems like a couple people who really agree with one another trying to make sure no one else disagrees with them. Now that's what web forums are all about, right? Huh.

OK... I'm a mathematician. Take my word for it. I suppose I should be one of those guys who believes deeply in such things as mathematical randomness in markets. And I tip my hat to the core original point of this thread, which (if I follow), was 'Isn't it interesting that randomness can regularly produce patterns that...
  • #177
  • Mar 21, 2011 10:28pm Mar 21, 2011 10:28pm
ha. good!
Quoting Captain Piptastic
An interesting post. Thanks for taking the time.

I'm making an assumption here so correct me if I'm wrong. You trade some market inefficiency that you've found? I can respect that. It's a smart way to trade.

You are probably familar with Edward O. Thorp. For those that aren't here is an interesting link about him:

http://webhome.idirect.com/~blakjack/edthorp.htm

Thorp trades inefficiencies in the market. Really, really well in fact.

What I wanted to point out about Thorp is his work on BlackJack (another zero-sum game). He can...
  • #178
  • Last Post: Mar 21, 2011 10:35pm Mar 21, 2011 10:35pm
professional guy!
if you take the math finance courses. there is one special course to deal with the random number generater!
Quoting Turveyd
The Excel Code looks impressive, but the random numbers a computer generates, aren't truely random there psuedo random, which I think is skewing the data.
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