stolen from wikipedia.
chaos theory describes the behavior of certain nonlinear dynamical systems that may exhibit dynamics that are highly sensitive to initial conditions (popularly referred to as the butterfly effect). As a result of this sensitivity, which manifests itself as an exponential growth of perturbations in the initial conditions, the behavior of chaotic systems appears to be random. This happens even though these systems are deterministic, meaning that their future dynamics are fully defined by their initial conditions, with no random elements involved. This behavior is known as deterministic chaos
end wikipedia
deteriministic chaos systems appear random. but are not. they are determined by a set of rules (in a market, there must be 2 parties for a transaction. if there are not price moves to the buying or selling interest. this is the rule)
If this market was 100% random, Fibs and S/R would never work.
i'm really suprised you came out with that one. the MIT guys could only fix blackjack because the game had memory and 8 packs of cards to a shoe therefore limiting the possibilities. comparing blackjack to forex is like comparing apples with asteroids or planets. could thay have done it with say 500,000 decks in the shoe and a table of a million players? were more skillful in tossing off the coin (lol, sorry couldnt resist)its not random,..its WTF...
attached is the spreadsheet that created it - have a go yourself, just open the sheet and hit F9 a few times.
you can make some brilliant trends
O.K., this thread was quite an interesting read. What I would like to have is the answer to my question by those that believe the market is random. That question is below.
If YOUR trade moved the market (not a guarantee of winning, but moving nonetheless), would you still believe that the market is random?
The way I see it, random requires actions to not be preconceived, influenced or known. It is like a sneeze that occurs sometimes when you step into the sun. You don't have a clue that it will happen until it does. Although, to be quite honest, I would have to say that this is also not random. GE losing billions of dollars isn't random, was its price drop of 12% on Friday random?
Perhaps I am thinking off topic? Perhaps I am thinking about movement versus others thinking about some grander hidden market theory?
In addition to the above question, if it is absolutely random ... how can one explain correlations? Again, am I missing some sort of "punch-line"? It is quite obvious that people are intentionally betting against the Dollar, thus Gold, Silver, Oil, Euro, Pound, Yen, Wheat, Corn and everything else placed in dollar value ... goes against the dollar over the last few years. If it were random, would you not see silver go down, while gold goes up? Natural gas stay flat, while oil moves up? How can such correlation exist in a random market? It isn't as if NG and Crude are vastly different. I could understand the "randomness" of Circuit City stock being correlated with Crude Oil for instance. That relation is random in a sense, though the specific movement of each unit isn't. Am I even discussing the same topic?
If someone in a preconceived fashion is making the market move in a certain way, that can't possibly be random. By definition it can't be. According to Merriam Webster "random: without definite aim, direction, rule or method" As a rule of the market, when there is competition for something, that value tends to go up. Statistically this is true more often than not. Random would present just as many cases of banks buying billions of dollars worth of a stock and while they do so the price goes down.
Another random market would be going car shopping. At one dealer I find a Camry for $4000, then next dealer selling for $400000. It isn't an accident that they are all priced in the $18000 - $24000 range for a specific model. That is what the market is willing to pay. Thus, the price isn't random. Again, am I missing something?
