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To what extent do self-fulfilling prophecies move markets? 5 replies

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TA self fullfilled prophecies... what a joke.

  • #21
  • Jan 1, 2009 1:12pm Jan 1, 2009 1:12pm
Quote
It is not "us vs them"...is it not random vs pattern...it is more like balance vs off balance, and the ability to read a chart (pure price, or "math" doesn't seem to matter), and sense the underlying emotion of the market.

Very well said. Couldn't agree more.
  • #22
  • Jan 1, 2009 1:18pm Jan 1, 2009 1:18pm
Not random rather chaotic, systems arising from biological contexts are seldom/ever random. Big difference, one means that there is no hope of prediction, the other is that there is an upper limit of repulsion against certainty. So you can never be totaly certain but rather gain a measure of it, but the effort to gain this certainty (edge) increases exponentialy. This is why the market will belong to those who can gain increased levels of certainty in the most efficient manner.
  • #23
  • Jan 1, 2009 1:57pm Jan 1, 2009 1:57pm
I just try to make sense of things. My point is to bring intelligent conversation to the table.

By the way, I have several thousand $$$ that go into ECNs every month. It's all pure speculation.... all based on momentum plays..... plays that are based on price action alone.

I hope for the best with my trading, because I can't identify why they will succeed or fail. I have 8 year backtest that show my strategies would have been profitable (very profitable) in hindsight. I use my imagination to explain why the setups work, because I can not observe why.

The point is, creating a set of rules to exploit a repeating phenomenon is the only true advantage, and because every year is different (with different chart shapes and economic environments) it stands to reason there is randomness. My only hope is that each pair's characteristics don't change (for example, EURUSD's ATR, that doubled recently compared to its 8 year historical ATR)....

Quoting Gaston
I know I am coming accross rather harsh, but given your history, tdion, I seems you enjoy a good debate.
  • #24
  • Jan 1, 2009 1:59pm Jan 1, 2009 1:59pm
Can you explain how they are logical? It's no wonder "fooled by randomness" is one of the favorite trader books.

Quoting HeikenAshi
Markets are logical, those types of transactions or "price actions" should be factored in your strategy.
  • #25
  • Edited 6:43pm Jan 1, 2009 5:53pm | Edited 6:43pm
Wow I was having a hard time connecting there for a while anyways…In short, I agree with -T the markets can be random, and TA, indicators…etc etc, are not always going to be the long term answers, but they are fun to play with and there are a lot of interesting and well thought out systems in FF and abroad, and some of them actually do work : )..One example is johnedoe’s 77 cross. I have not tried it but looking at last years results it’s very simple and effective over time. Interesting you started this thread again LOL because, I recently opened up a small subbie, and started a chart journal testing ways to exploit randomness. In brief, some of my theories for Ironing out the randomness have been, understanding who’s in the market, what they do, and what they need to do to make a buck, then waiting for the price action to unfold.

Old Fart out….

Happy 09 T
It's me...
  • #26
  • Jan 2, 2009 10:15am Jan 2, 2009 10:15am
The atoms in my body vibrate randomly in three dimensions, but I still seem fairly coherent (most of the time).

The fact that there are elements of randomness in something, at some level, does not imply that there is not a higher order of organization.

I think too many people spend their days looking at 5m or lower charts.

There are fundamentals which will provide a long term impetus to push prices to a fair value in the economic sense. There are also a lot of variable factors that will push the price up and down from that fair value -- not the least of which is the emotions of people that make spending and investment decisions.

I like to think of the market like waves in the ocean. They seem fairly random. They can interact and cancel or amplify each other. A swell or depression is eventually going to be corrected. Speculators, banks and other sources of transactions provide the wind.

Tidal forces, like economic fundamentals, will set the expected level at which we play in the waves. The only problem for us is that economic tidal forces are not so visible and regular. Also, with all the financial turmoil the markets are fairly stormy.
nav++
  • #27
  • Jan 2, 2009 2:55pm Jan 2, 2009 2:55pm
Quote
Wow I was having a hard time connecting there for a while

Yea, me too. Traceroute died before it hit the server. Bad routing somewhere.

Quote
The atoms in my body vibrate randomly in three dimensions, but I still seem fairly coherent (most of the time).

Brownian motion.

Quote
The fact that there are elements of randomness in something, at some level, does not imply that there is not a higher order of organization.

The average velocity (measured by the pressure exerted by the atoms on their container) is proportional to temperature. This is a fundamental law of chemistry. So while you may not be able to know if a particular atom will exert a particular force, you can certainly know that the odds are high or low based on the temperature of the system.

Figure out how to take the market's "temperature" and you're good to go. The "higher order" can be seen by watching how external (non local) traders trade.
  • #28
  • Edited 8:34pm Jan 2, 2009 8:20pm | Edited 8:34pm
Quoting tdion
Do fibs work?

Do MAs work?

Do Andrew's pitchforks work?
I think your summary is far too simplistic Tdion. The truth is that an individual has to work. Whether it is working with a fib, MA, or pitchfork to progress THEIR work, it really doesnt matter. I dont understand how anyone out there can say "Oh, just put this MA on your chart and it will do all the work for you and you bring in the profits!" I know there are, but it is crazy ... and I wouldnt get so strained about that minority. Indicators dont work, TRADERS do. Period.

About the random thing, most to us is random. Although, I have traded and made money in situations that werent random at all ... they were actually spelled right out on a central banks website. I mentioned that in another thread you made about the same thing.

Quoting Craig
hopefully somebody will benefit, because it's obvious nobody actually reads anything I write. .
Not true, I like your posts and I have ventured into different research efforts because of them ... didnt quite work, I doubt my statistical/math knowledge is quite up to par with you ... I dont know what I am looking for?

Quoting FOREXflash
I totaly agree with Tdion on market randomnes!
The "main" indicators like mas, sr and fibo etc works "sometimes" becouse
majority of traders use them, but that all means a sh## when some of the
big company or bank make a transaction....after all, they move the market...
Its sad that people have to reduce to saying that "indicators" work. Do people not look within their own abilities? We are so lacking in ... something we have to contribute our failure or success on an indicator instead of ourselves? I dont know, what I make or lose is because of me .. plain and simple.
The market is my nation. Traders, my family. Hello, brothers and sisters!
  • #29
  • Jan 2, 2009 8:49pm Jan 2, 2009 8:49pm
Quoting tdion
I just try to make sense of things....
Is this the same tdion that recently admitted they were ready to "start trading live"? Hmmmm

Either way, and who cares....

I trade Price Action / Technical Analysis. I am profitable. Does TA or PA work? Again who cares? I make money doing it. That's all that matters. I see a pinbar, I am on it. Do they always work? No, but more often than not....they do. - It's called playing the percentages.

I think the biggest issue is that most traders are thinking in terms of making millions overnight. It's not going to happen. And before someone mentions Bill Williams - again, who cares? He is not you.

I think this kind of pointless debate really does no good. I suspect this is an attempt to spread the misery. I will tell you what: If you would like a lesson or two....let me know. I will make some videos for you.

These threads are really tiring. If it can't be done, then why bother? I agree with the poster that said he expects this out of a 6-9 month trader. This is another "I can't do it, so it can't be done thread."

Just simple observation....it's all random, there's no point, etc.....then why bother at all? Luckily I am too stupid to realize it's all luck.....and I go ahead and profit every month. Oh well.



By the way - if it's all random....WTF is .7100 in the AUD/USD?
  • #30
  • Jan 2, 2009 8:52pm Jan 2, 2009 8:52pm
Quoting tdion
what would it take to DISPROVE randomness
You can't prove or disprove it.

Just focus on what it takes to
operate in the market as it is.

That's all we have...for better
or worse!
  • #31
  • Jan 2, 2009 9:09pm Jan 2, 2009 9:09pm
Quote
You can't prove or disprove it.

So randomness is like God? Hehe.

Actually you can't really prove it, but you can gather a lot of evidence. You most certainly can disprove it, however, by determing the distribution of the data. I've written about that till my face turned blue... then I went and doubled my account while ppl were saying "it can't be done!" ... Rofl.
  • #32
  • Jan 2, 2009 9:19pm Jan 2, 2009 9:19pm
Isn't randomness a pattern in and of itself?
  • #33
  • Jan 2, 2009 9:25pm Jan 2, 2009 9:25pm
Quoting rbock
Isn't randomness a pattern in and of itself?
This thread is to trading as this video is to soccer:
Inserted Video


  • #34
  • Jan 2, 2009 9:58pm Jan 2, 2009 9:58pm
Quoting FXSurfer
This thread is to trading as this video is to soccer:
http://www.youtube.com/watch?v=79vdlEcWxvM

How funny. I hadn't seen that in years. Although i suspect Tdion would be more a member of the argument clinic.
  • #35
  • Jan 2, 2009 9:58pm Jan 2, 2009 9:58pm
Gezzzzzz.. Rabid I got to remind my self never to get into a chemistry debate with you.... LOL

Quoting Rabid
The average velocity (measured by the pressure exerted by the atoms on their container) is proportional to temperature. This is a fundamental law of chemistry. So while you may not be able to know if a particular atom will exert a particular force, you can certainly know that the odds are high or low based on the temperature of the system.
It's me...
  • #36
  • Jan 2, 2009 10:23pm Jan 2, 2009 10:23pm
Finding patterns (at least mathematically significant ones) in the Forex market is the equlivent to seeing the future while looking at a scrambled TV screen.

Indicators are simply filters... they might be able to help you see an image but your not going to get HD unless you know the inputs (incoming prices) that you are filtering.
Keep it simple stoopid....
  • #37
  • Jan 2, 2009 11:21pm Jan 2, 2009 11:21pm
I'm outta here (this thread, anyway) Seems like the same old huffing and puffing "tdion's got a bad attitude." "tdion won't stop posting these threads."

Well, I am not going to tangle with the same people again.... I was only adding a new twist that no two years are alike, and TA is pretty worthless IMHO.

To those profiting with TA (clockwork ) may all of your trades be winners!
  • #38
  • Jan 2, 2009 11:23pm Jan 2, 2009 11:23pm
Quote
Isn't randomness a pattern in and of itself?
That's a fun discussion, lol. Subject to a great deal of philosophy.

Is the lack of something... ie: nothingness, in-and-of itself... something?

Sometimes chaos has a lot of order. Nonsense makes the most sense.

Quote
Gezzzzzz.. Rabid I got to remind my self never to get into a chemistry debate with you.... LOL
LOL. Ideal gas law. PV = nRT.

Trading is fun for that reason tho. Each person can bring in their own life experience. A former military man might view it as a war, a mathematician views it as a statistical puzzle, a former track star would see it as a marathon, a scientist would see it as a natural system, a police detective would see it as solving a case, etc.

Not sure if I can find the link, but there was a great little webinar on traders psychology I saw the other day. Think it was on the CME educational section, don't know for sure. But it was this lady that was talking about some of the challenges traders face.

This guy, one of her clients, had this problem... every day he'd start the day by making bad trades, then catch up and be profitable by the end of the day. He needed the motivation of failure in order to succeed. In several previous careers he had experienced the same pattern (failures followed by successes) and had taught himself that in order to be successful you first must fail. His own life went thru that pattern, career wise, family wise, etc. The pattern repeated itself over and over, and dominated his trading career until he sought help.

It's amazing all of the things we bring with us in our life, even more so that it's so easy to overlook them.

edit:
Quote
Well, I am not going to tangle with the same people again.... I was only adding a new twist that no two years are alike, and TA is pretty worthless IMHO.

Well, problem is... at least as I see it, I could sit down and lay out solid proof that there's non-randomness in the markets. But I don't see how it'd even remotely make an impact. It sounds like your mind has already been made, so what's the point of making a cogent argument to the contrary? All that's left then is a reduction to the frivolous.
  • #39
  • Jan 3, 2009 12:35am Jan 3, 2009 12:35am
Solid proof? Did you say solid proof? It's pretty obvious that myself and others would welcome any sort of sensible evidence that that there is order. So, by all means, lay out away.

Quoting Rabid
Well, problem is... at least as I see it, I could sit down and lay out solid proof that there's non-randomness in the markets. But I don't see how it'd even remotely make an impact. It sounds like your mind has already been made, so what's the point of making a cogent argument to the contrary? All that's left then is a reduction to the frivolous.
  • #40
  • Jan 3, 2009 7:27am Jan 3, 2009 7:27am
So Tidion.

It's all good. Raising valid (in my view) doubts about Technical Analysis.

Now tell us, what work??

What is your take on this?
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