TA self fullfilled prophecies... what a joke.

People lose because of bad systems and bad emotions. "I feel great... let er run aint gonna cut it"
The market zeroes' out and a tech system only goes so far. The buyers or the sellers stop/increas and the market turns.

Another example of emotions getting in the way is worrying about whether TA works or doesn't - or for that matter whether FA works or not or astrology or whatever.

No matter how many times it has been said it needs repeating that how one manages their trades is more important than what they use to enter/exit.

HKMA = Hong Kong Monitary Authority. I set up a thread before time, October 2007, discribing the "set bounds" that the HKMA allows their currency to trade within. I placed a trade at the banks set bounds and it simply held at that point for a couple weeks before returning up toward the middle of the allowed range. It was not random at all, on the HKMA website they say in plain and simple terms how they wont allow it to go beyond a certain point. It got there, I placed a trade, and it did in fact go the other way. The latest time it hit the bounds, currently there, the bound is again holding ... however, due to interest rates I cant hold onto the trade. That is not random, just conditional to market.

Again, I agree with nearly everything you say ... however, there are two problems with your relentlessness. The first being is that there are moments of nonrandomness you dont pay attention to. The second is that you seem to be under the assumption that without a great string (I suppose you would call it) of luck, you wont make it in the markets. You may not become a millionaire overnight without this "luck", but with management of a productive outlook, you can make consistent money.

On a personal note, why do you care about other peoples ongoings so much? I think those that make money dont give a poop about other people and their "having to prove" what they do is actually "real" or not "based on random luck".

How's that working out for you?

Great.

This topic (effectively “Are markets random?”) has been addressed many times. Some time ago I posted my thoughts here.

What intrigues me is the wide diversity of opinions at FF.......

-- On the one hand, we have those who believe that it’s possible to succeed by simply taking trades whose R-value > 1 (i.e. ensuring losses are smaller than wins), and applying the 2% (or whatever) rule, all with discipline. (My thoughts on this here).

-- On the other hand, we have folk saying that even with the best possible analysis; suitably selected setups; optimal entries, trade management and/or R-values; MM beyond the 2% rule; and perfect discipline, it’s impossible, or at least extremely difficult, to be long term profitable.

I assume that the truth lies somewhere between these two extremes.

The Truth Is Out There - X Files And yes its tru that not everyone can be a trader and that most of people fail at this bussines or stylish gambling with clues, whatever. The seeking for the cure is what keeps us going. The question is how many from ff are profitable? I guess its 5% but everybody pretend to be making hundreds of pips day in day out. Thats just bullshit, pardon.

Tdion,

I was just wondering, In your opinion, what would it take for you to give a method or system a "Tdion stamp of aproval"?

Possitive results for Xyears?
The cause of the price move that results in profit and is repeatedly exploited?
Being able to Automate the process so Human error is Illiminated?

Im asking because Im genuinely Interested what it would take for a method/system to be acceped as profitable by you.

Love the threads and posts, keep it real!

Leon

Well, so far as I'm concerned, forex is a vehicle that has the potential to pay out huge dividends.

I am hopeful that there is some under-pinning reason for the trades I place to be predictive more often than not, though I can not see the reason.

I feel that any system based on charts can "shit the bed" at any point without warning.... go into a disasterous tailspin and lose 50 trades in a row, and leave you penniless.


So the answer is, even with a 1000 trade backtest over 10 years, the markets underlying supply/demand can change on a dime. Example: 2008 EURUSD after the banks collapsed.

The reason I bring up EURUSD is that it is my bread and butter. It is what I focus all my attention on. And for it to suddenly change characteristic is proof enough for me that no charting system can ever be considered stable.

Shit the bed? I thought that expression was only indigenous to my neck of the woods.

Yeah, it's amazing how a method with a favorable win rate can simply stop and never work again, or at least not until you've been slaughtered. Strings of 15 or more consecutive losses can and do happen. Fifty? That's the kind of run that leaves you trying to rebuild a 20k account by trading with pennies, and doing it while sobbing and blowing big snot bubbles out your nose.

Brought a smile to my face.

looking at: http://www.forexfactory.com/showthre...=80791&page=15

it suggest that 73.03 % Believe that the market is not random.





What I would argue is that:

1. forex (including: past, current and future prices) could be theoretically complete random.

2. forex (including: past, current and future prices) is in praxis partially random

GENERAL time thoughts:

Time ???

* future: as the future is unknown and not yet in existence: There can not be a 100 % proof of any sort. All what one can say is base on: probabilities, expectancy or hope.

* present: ??

* past: the past forex price action are the only thing we really have for sure. (if one has correct data).



From the point of time: we have to use past data to discuss forex randomness - if it should make any sense.





1. forex could be theoretically complete random.

* alone because of the time (future) factor forex could be theroretically complete random.

the past at least could have been completely random - as the past as we have it - was at one point in time the future.


At present, I do not think that one could argue against the: theoretically possibility of complete randomness in forex


2. forex is in praxis partially random

* in praxis I would argue there are quite a number of points why the market is NOT completely random:

- people involved in forex trading have certain prefiltered ideas how the market behaves (is it through word of mouth from friends with 'more experience', or books or any other level of edjucation)
- there are different financial institution which are able to influence the forex market to at least some degree
- because of human involvement - there is a human psychological influence too
- even automated trading (was normally programmed by human) ;-) have in there concept some of this conception.
(in fact it would seem that it would be very dificult to program an absolute and complete random automatized trading system. (did not think that through but I don't think it is possible))

just to mention some.

* as I said because of the reason of 'time' we have to look at past data.

And in praxis: past data show to certain degrees repeating patterns. (I do not believe that one can disproof this).

For instance the general pattern of price up and down movements: I never saw any chart over 10 years - whith daily data which was only moving 100 % in one direction. and even if there would be one on daily data - what if we move down to tick data for 10 years.


In fact in praxis one can find quite a good number of repeating patterns: What I'm not saying that all or even any of them are profitable to trade as such.




BUT: anyone looking at 10 charts for a currency each spanning a different year - will know that forex prices is not perfect structured either: That's why I believe it is best to accept partial randomness.


3. Some other points to stimulate thinking:

* There are more problems to come: even if all existing yearly charts for a currency pair would be the same: one MUST NOT conclude that we have a 100 structure because:

a. of the time (future) factore there could be always something else.
b. if one believes in absolute and complete randomness of the forex market: this randomness could produce by chance also 100 years of same yearly charts and still be complete random.

Inf fact one can never know: it's all based on probabilities.

4. what does it mean:

So basically I think the only sensible conclusion is:

* a partial randomness (WHICH IN FACT: most 'properly all' traders do subconsciously).

* In relation to trading this means: first of all there is no 100 guarantee for anything in the future.
* there are probabilities which can be to some extend be extracted from the past (data - as well fundamental situation and other influences)
* this probabilities might change (a system with set rules might not always work the same)

IT IS STILL better to include certain probabilities (from the past) than basing a trade on nothing (what in it's fullest scene is not really possible as one is already limited with the money one has available)




FINALLY:

* if forex would in fact be completely random: the use of fundamentals or indicators would just have no effect - NOT good NOR BAD.

so if unsure:
in case of actual complete randomness:


* it will always be better to use something to base a trade on: in case of actual complete randomness of the forex market you can't loose


in case of actual partial randomness
* in a partial random forex market you might win an edge with it (but take care you could also win a disadvantage with the wrong info, indicator used)


in case of actual total structure
* don't know anyone who would believe that


I would surely agree with you on that: but that does not necessary imply actual and practical complete randomness. and if one is a already after 50 trades against one penniless will also depend on MM and UnitSizing.



If charts are completely random than all fundamentals have also just a random effect. In fact you are just being lucky or not lucky as there is nothing to base a trade decision on.


I'm not saying that we can ectract enough structure out of charts to be always a winner (but it is not a complete randomness and so it is better to extract as much info as possible. (same goes for any other helpful info - which might influence the market)

During periods of low liquidity or when both the US and London markets are closed, the charts would appear to be performing randomly. Trust me.....there is absolutely nothing random about FOREX. The more I study FOREX, the more I can appreciate how unrandom it really is. You just have to have a knack for putting the puzzle pieces together.

The first step in understanding the non-randomness of FOREX is to put away the indicators and instead focus on what makes the prices move.