Short Term Trading is Quantum Physics

This is bull s##t (excuse the pun)

TrevA

If you think thats B.S put your entire account on the line in your next trade.If you cant do that then you acknowledge this randomness.Human beings have an excellent ability to pick out a pattern in just about anything ,if that pattern repeats itself 100 times in a row it is a certainty ,but the first time it deviates it becomes random.Its the same reason most traders dont invest too much in any one trade.

any timeframe would have some noises and some patterns ... consider this ; around 100 bars of 1h tf makes a 1-week bar , in that 100 bars we will see some known patterns and some random noises , now consider 100 weekly bars... wont you see some known patterns and some random noises too ? we might even see similar percentages of noises and patterns being created ... so what i am saying is that you might need to see the longer tfs in big enough samples to see the noises and patterns ...

you're linking two unrelated concepts, randomness and predictability. if something is not predictable that does not mean it is random, it is necessary, but not sufficient.

random
adj. 1. Unpredictable (closest to mathematical definition); weird. "The system's been behaving pretty randomly."

un·pre·dict·a·ble http://cache.lexico.com/dictionary/g...una/thinsp.png
1.not predictable; not to be foreseen or foretold: an unpredictable occurrence.

Yes you are correct.

Just to chip in financial markets are not random events as nothing occur by chance in nature or in the universe. Financial events are parts of the universe we try to seek to understand.

If something is not random this does not also mean that it is predictable. Actually all things do not occur by random but nothing in nature is predictable due to error or precision in our methods of observing them.

What mankind has been able to call prediction is actually approximation of events that has occurred and remain in permanent position -e.g. mineral deposits or events that has one direction as in fluid dynamics - flow of water, currents, etc.

Financial markets are even more problematic because of its two directional pattern (buy and sell)

Quote:
Originally Posted by Pavlov's Dog http://www.forexfactory.com/images/buttons/viewpost.gif
If you think thats B.S put your entire account on the line in your next trade.If you cant do that then you acknowledge this randomness.Human beings have an excellent ability to pick out a pattern in just about anything ,if that pattern repeats itself 100 times in a row it is a certainty ,but the first time it deviates it becomes random.Its the same reason most traders dont invest too much in any one trade.

you're linking two unrelated concepts, randomness and . if something is not predictable that does not mean it is random, it is necessary, but not sufficient.

Why?Because ther are always unknown forces operating in EVERY market at every moment,it takes only one trader somewhere in the world to change the entire course of the market.Thats all only one.Any exception that may exist in your mind will be a source of conflict and potentially cause you to perceive the market information as threatening

My triple integral theory solves this problem.

Go on then, explain further.

Inpredictable predictability.

Lets take a point 'A' and a point 'B'. Point 'A' being your home lets say, and point 'B' being your office.

Distance from A to B is, lets say, 1 Kilometer.

You have had breakfirst this morning, you kiss your wife and kids good bye, you take your car keys off your key hook, and off you go.

At the traffic lights you see other businessmen walking along the way holding their briefcase , and all of a sudden it dawns on you. You remembered that you have forgotten yours at home.

Now what?

Well...

It depends in my opinion:

We said before distance from home to office is about 1 Kilometer, depending on how many meters you have traveled already away from your home, and depending, on what it is that's inside that briefcase, will make you decide if:

1) You are only 150 meters away from home - no sweat at all, you go back without even thinking twice. (I mean you need lunch today, no?)

2) You are already 240 meters away, well, after a seconds pause in your mind, you go back, it doesn't bother you.

3) You are now 380 meters away from home, hmmmm, well.. OK, with a small huff, you return back, it's OK you say to yourself.

4) Damn, you are already half way, shoot! '' I can't belief it! '' you say to yourself, how could I forget my lunch and briefcase, ...but what the heck, I'll go back.... OR MAYBE NOT! I don't know... NOW the contents of that briefcase becomes more and more important. (That would be your fundamental news in the markets)



5) !")(*(***(*&%$%!!!!!! .... NO WAY! 890 meters away from home, you can see your office door, you would have been right on time at your desk this morning, now what..??! ....Your lunch would have had to be scrum plushly delicious, or you would have to have that sales contract you have been working on all week inside that briefcase in order for you to go all the way back home to fetch it.

You see folks: this is my point.



The same story obviously goes with price.


The charts representing the price which in turn represent the markets, are all, as you know, fractal. The 1M is the noise of the 5M, which in turn is the noise of the 15M, which is the noise of the 30M, which is the noise of the 1H, which is the noise of the 4H, which is the noise of the Daily, which is the noise of the weekly, and finally, the weekly is the noise of the Monthly Price-Chart lol. But it all starts at the tick of price.... 1 to 2, to 3,4,5,6 etc.

It all starts at a very small level, price going from 1.5800 to-15, and to 1.5824, -38, -50, -62, -70, -79, -89, -96 and finally it hits the 1.5900.

Of course you were short in this example at 1.5800, at what point would you consider and say to yourself, ''oh dear, another one down the drain? A miracle would have to happen for price to come back in your favor!''

Of course that above example applies to the higher TF's as well, price going from 0.90 to 1.59 - at what point did you think to yourself ,the chances that we might see the 90's again are getting slimmer and slimmer, as price moves up and along?

So, randomness you are asking me? Definitely not! BUT, yes but, it's exactly what some of you folks have pointed out before:

Some people DONT'T CARE how far away they are '' from home, or that point A '' they NEED that thing NOW, at any price, at any time, they can't wait for it, for whatever reason. BMW needs to pay it's suppliers in the States, Rols Royce is shipping over new aircrat engines to a German factory, or, a trader who is in '' for all or nothing '' , a now or never type kind of guy, who has any money at his disposal at any time, etc etc etc.

THAT above would be your '' bit of randomness '' in the other wise very orderly organized markets.

So are the markets random? Yes and No, I think is the right answer.

Thats the way I see it.

Nope.. Totally disagree with the home and briefcase analogy..

Here's why..


You are driving to your office, and you are just about to park, when you text message on your cell phone.. it says "Hi, this is Angelina Jolie, I'm naked on your bed.." Following the text message, there's a pic and she is naked on your bed.

You don't go.. "Hmm.. but I'll be late for work!!" You peel out, and haul your white rear end back home. Even if your home is 100km away..


Now let's say your primary customer is Japanese, and you are in Europe. You don't go, "Oh, the Euro is high against the Yen so whatever the customers pay me, I'll just keep it in Yen, I mean paying the mortgage and having food is overrated right??"



I will now give my big calculus resolution to all of this..

Let's say you have the Boeing 747, with it's 6M+ parts. Let's say you are trying to figure out what it would do in a certain situation; and you have all these people babbling on about how it's impossible to predict because you'd have to measure all of 6M+ parts etc.. Well, if you know calculus, you will know you don't have to actually do that.

Taking a triple integral, you can find the center of gravity, and now in terms of movement; you can refer to the 747 by the center of mass, and calculate based therein.

Same with the market; you have a 6M+ news sources influencing each other like parts on a plane, but if you know how to take a triple integral of that, you can now refer to it by the center of mass..

For any given chart, that center of mass is the CURRENT PRICE. That's it.

Most who say that the market is random simply don't know Calculus.

http://www.grc.nasa.gov/WWW/K-12/airplane/Images/cg.gif

'' Nope.. Totally disagree with the home and briefcase analogy..

Here's why..


You are driving to your office, and you are just about to park, when you text message on your cell phone.. it says "Hi, this is Angelina Jolie, I'm naked on your bed.." Following the text message, there's a pic and she is naked on your bed.

You don't go.. "Hmm.. but I'll be late for work!!" You peel out, and haul your white rear end back home. Even if your home is 100km away..''

.... Very true twoblink!

But that's exactly my point: Depending what it is that you have in that suitcase will make you decide if the way you have traveled so far seems small or large in YOUR eyes, its all relative.

If you had your ugly ex-girl friend on the bed you wouldn't even go back 1cm!

And that's what I mean, that's what makes the markets, some people have Angelina Jolie waiting for them and some have ugly ex-girl friends waiting for them.

Some of them would think twice (can you believe that??) even if Angelina Jolie would be on their bed, and some (can you believe that???!) of them would even go back 100km if the ugly ex-girl friend is trying to make up again, and they are desperate to have someone around, even if it's their '' ex ''.

I think that's what makes the markets, It all relative. What is a lot for one is nothing to another.

Thats what I meant when I said:


It depends what you have in that briefcase and it depends how far you have traveled already AND it depends what kind of guy YOU are that will decide the outcome. 3 variables that make the markets in my opinion.

Technicality (how far away you are from home) Fundamentaly (what's inside that briefcase, and who is waiting at home) and YOU.

BTW: For any given chart, that center of mass is the CURRENT PRICE. That's it. - I agree with this 100% as well. Nice post.

Totally agree with the home and briefcase analogy, the best analogy I have seen so far! Thank you.

Let's settle this <----------------

So after reading this thread it comes down to one person's random is another person's pattern and vice versa imho.
so the market do what they do and we are the random element. lol

No..

Those who know very little math see the market as random..

http://www.world-mysteries.com/illusions/young_old2.jpg

Do you see a young woman or an old lady?

Well, you're both right and your both wrong. If you don't know what you are looking for, you think the other guy is smoking crack. That's all.

Once someone shows you what's going on, then you see..

Gotta disagree, Albert.

You may have all cog's calculated, and your aircraft is flying straight and level...

Then someone drops, out of nowhere, a ton of weight in seat 73F.

That's the analogy of the transactions Trader613 is talking about. These events are truly random.

Price action consists of repeating patterns, events (random or scheduled), and noise.

I do agree the market is not random, or else I'd have been out of here a long time ago.

Price action consists of repeating patterns, events (random or scheduled), and noise.

I do agree the market is not random, or else I'd have been out of here a long time ago.[/quote]

The market and its participants are random but the outcome is probabilistic
that is why you stick around