Is the market random or not ?

I am not sure what you find so funny soultrader, but I can assure you that I'm the one laughing here, all the way to the bank!

Let me elaborate a little...

Some 6 years ago, a few colleagues and I were presented with an opportunity to invest in the foreign exchange market. Quite a large figure split between us, and we based our trade decision off two important economic indicators that has since provided a profit of over 9000 pips (or 90 cents). No charts, no technical EMA's, Stochastics, etc... etc... This trade is still active today mind you...

Funny how I didn't even know what a "pip" was until I started trading online, trying to chase the fluctuations. It was all cents to me previously.

If it were RANDOM, we would have been better off to go to the casino and try our luck with blackjack or roulette.

We based on our decision to go long on the Euro/USD off three important economic facts:

a) Suddam Hussien had only recently requested payment for his oil in EUROs. This alone was the best thing that ever happened to the EURO, and is the reason why it's doing so well today. Many laughed at his decision, and thought he would fail miserably from it. Well... Who's laughing now eh? Funny how the US had to string him up to stop him from devaluing their dollar.

b) The USA had just entered into another WAR that they simply cannot win, and would prove to be a costly mistake as it was in Vietnam. Once again, they'll probably have to run the printing press into the ground to pay for it.

c) Nixon back in his day cut the value of gold from the dollar, while this was not the main instigator of our decision, it surely played a significant part as it is inevitable that it will happen again due to point B above. If you don't know, Nixon ran the money printing press off its feet to pay for the Vietnam mistake.

If we had tossed a coin when placing our trade, I'd hate to see where we'd be today if it turned out that we were to go short.

That is not random, it's economics my friend. PROFITABLE ECONOMICS!!! LOOK WHERE THE EURO HAS GONE SINCE BACK IN LATE 2000!!!

UP, UP, UP AND UP AGAIN!!!

Who ever said previously that it is no wonder why most fail in this business, is surely right if they meant the ones who think it's all RANDOM..


Heh

mmm you are upset because I was honest enough to tell that I hadn't read the thread, well I was in a hurry this morning I apology for telling the truth, next time I wont say it to avoid upseting people, anyway I just readed it and it didn't change a bit my opinion. and about the schoolboy remark, well ... I like to say things as simple and resumed as possible, they may look simple but they are well thought.

What I see here is that many of you think about the issue in a bipolar way. the market is something between fully random and 100% predictable and taking the risk of being called a schoolboy again, here is a dummy graph that shows my idea about this and your own personal definition of randomness painted in the graph for greater clarity:

Almost forgot soultrader, your Excel chart is flawed. Not your fault, very nice work indeed. It's the random algorithm Excel uses, which has been known to be seriously flawed.

If I were to re-create your chart using my own rand algorithm, it would look like an electrocardiogram showing ventricular fibrillation.

Hate to split hairs with you, but the antonym of randomness is order. And in order we find patterns and elements of predictability.

I will say the best we can do is trade news releases with a straddle, and even that isn't always predictable.

It's better to think of the market like it's NOT random, otherwise all of our studies are in vain. lol

The pip count is complete random. But the market often moves in one direction, and that is not random.

I had a heck of a time trying to save any normal looking statement off of mt4. It always wants to save it as an html and then butchers it in any other format. Anyways someone said a few pages back that there were no statements to back up any claim of un-randomness. So I suppose I'm setting myself up for ridicule here but I have been trading 100%, because the market is so easily predictable. I used to believe it was random until I 'got it.' Last week I made 30 trades using my methods on the 5min charts and harvested 954 pips. I don't use any EA's just manual old trading with a couple lines. Right now I'm in a longer cycle trade that is in DD, but most of my trades go into temporary DD, and it's ok with me. The longest trade I've had in DD trading off the 5 min chart is three days. I don't worry though because I know where things are headed. I'm not going to make a mint, but I am going to buy a farm one of these days, and maybe teach some close friends to do the same. Be on the lookout for the Scotty B home hydro energy system! Forex funds my crazy business ideas and my future children's education.

Maybe someone will steal my identity now?

you mean like the GBP is going up despite being in the shit deeper than a deep thing?

ahh, the penny drops.

they are.

Why don't ANY TRADERS in this forum show profitable live account statments. I mean, not even a single one.... except Mystic_Genie who had a lucky week.

Would you like to post your statements please...hell, I don't even care if they show that you have made losses every month.

I would like to see them.

Thanks google doc for helping me edit out my real name and account # and saving as pdf! Go Google!

I am amazed Scotty B. This must be a paper trading account isn’t it?

Anyway great performance.

anyone on here apart from me know about 'clumping'?

Card clumping?

http://www.borisbj21.com/Page8/page8.html

maybe, never looked at cards though.

just studies that were done extensively on roulette and other games of random chance - clumping is a phenomenon that exists in random games like roulette or even coin tossing where you will get x heads in a row or x blacks vs x reds etc.

clumping is a very real phenomena and it's what makes a trend even in a random arena such as roulette and forex.

JMHO, but statistical gaming is different than trading the markets, as the later deals with an emotional factor.

only if that's the route you choose.

adding the advantage of the emotional factor provides the edge.

Yes, I suppose that's true.... in the dictionary.

But this isn't a discussion of the English language. The subject is a mathematical concept. And in the realm of statistics, the "antonym" of a p-value of 0 is a p-value of 100.

I'm not going to give a basic statistics course here (GIYF) but in any hypothesized correlation between variables, through a process of hypothesis testing you get a p-value which is basically the probability that any observed correlation between those variables is due entirely to chance. A p-value of 0 would mean that chance had no part in the correlation (an entirely predictable, or if you prefer, ordered causal relationship). A p-value of of 100 would mean that the correlation was entirely due to chance (a completely random effect).

To claim that the market is "either random or predictable" is to believe that the only possible p-values of any observed correlation in the market are 0 and 100, which is patent nonsense.