Is the market random or not ?

How do you determine volume in the Forex market?

Short term the market is random - just imagine a simple currency hedge from a big company which want to hedge their risk. They don't care about the current price...

Long term (fundamentally) it's not random.

we do not talk about traded volume. it is tick volume which gives pretty good clues.

i agree, but generally saying the market is random is a misconception. same as "for every seller there has to be a buyer" .

Really ? Tell me how most of TA traders in the FX market trade without volumes then ? You speak like there is a meaning of every move in the FX market. You do know there are companies who buys/sells simply because they have to and price doesn't matter ?

yeah whatever. keep cool...

That's a respond I could expect from a 18 year old kid. I've given up trying to enlighten new participants on this forum and I know remember why.

Sentence of the day;


Your mind is like a parachute, it only works when it's open

erm, what's your problem? you offend by arrogant replying, not more. you do not need to enlight me for sure, ty.

If you're 100% sure in your definition of the market, why are you even posting here without following your statement up ? Like with you as for me, I don't mind what other people think or believe but when they enter a discussion here on FF, participants could demand a more brief explanation from a person. Have a look how those "yes" and even some"no" voters gave fantastic explanation regarding this topic.

Looking at some of the names on those who voted "yes", I start to understand what they mean. A quick calculation of their market experience would give us something around 60(+) years while I would bet that number is a lot higher compared with those who voted "no". Also considering the fact that the crows always have wrong, I can only conclude that this have been an educational thread for me and thank you all for your detailed explanation earlier in the thread.

Price bars mean plenty w/o volume. Price action as a whole goes to market sentiment. It's quite easy to determine in advance whether the day will likely be a ranging day or a trending one. Trade accordingly then.

Wow not bad. Care to teach us? If I understand correctly, you say you can tell me on the price-action i.e Asia session if the day will be ranging or not ?

Within a certain percentage, obviously nothing's perfect. Still, you can make an educated guess. As the day progresses further you can then refine that more or discard the guess. Still, it's a decent way to filter out the least predictable days. Having a decent way to figure out when you should stay out of the market is useful in and of itself.

Read here:
http://www.forexfactory.com/showthread.php?t=136255

Today was another classic day. We had an early day imbalance above yesterday's high, but fell back within range. That speaks loads to volatility and tells you to watch for a potential range expansion that might stick. Price did exactly that, it rallied at the hourly 21 EMA and re-extended back up to land right on the weekly R2/R3 midpt (also happened to be the 50% retrace of the big move down).

If you had any questions about the daily move they would've been clarified when price came above the daily high, retested for support and broke higher. That was the final dead give-away, but there was a clue to be found earlier when the bottom didn't extend further.

I don't want to come off sounding like a guru here, I'm fairly new at this style of trading and it's been around since the 80s in one form or another... so I'm the new kid on that particular block. Most of what I've learned so far comes from a combination of the CBOT material, some stuff from Linda Bradford Raschke, the book "Mind over Markets" and a lot of pattern study.

I like this.

Let me breifly explain my beliefs.

In a generalized view, I believe that the markets are not random, but it can often appear that they are. Please follow my logic. Every time price moves up or down, even by one point, then someone just participated in the market for a reason. Reason opposes randomness, and as such discounts it. To anyone who was informed of who influenced the market to move that 1 pip, or better yet WHY they entered the market, the move was reasoned, not random. However, this same movement might be perceived as random by anyone who does not know why price just acted as it did. Someone a million miles away saw price go up 1 pip, had no idea why, and states, "The markets are random". The difference between the two observations is information, or knowledge. Therefore, randomness can be perceived through unawareness, ingnorance, or by any other means lack of knowledge.

So, my view is that markets are random if you do not know why price is behaving the way it is. This concept applies to other areas as well, take baseball for example. If I had never been exposed to the sport, never played it or watched it, and was taken to a game, I might make an assumption that the players are acting out of randomness. To me it would look like they are just throwing the ball for no reason, running in circles, and people are clapping all the time. I would not be able to make any predictions about future behavior of the players at this time. If, however, someone next to me explained the rules of the game and why people were behaving as they were, then it would make much more sense to me and no longer be random. It would be reasoned, and I could make assumptions on what players are going to do next, based on this reasoning.

So, to rationalize the market, it is my belief that you must know why price is moving, otherwise you are trading randomness. Is it possible to know why every pip moves the way it does? Of course not. But if you can understand even one reason why price will behave a certain way at a certain point or at a certain time, then you can profit from this, as it is no longer considered random.