Long term vs Short term, EMH vs Behavioral markets

I just wanted to have discussion on what your thoughts are on the matter.

EMH vs Behavioral markets

Long term trading vs Short term trading

Investing and understanding economics and fundamental analysis
trading and technical analysis

does price have a memory? no memory? does the market care about momentum? or is it all discounted in the price at every second it is quoted?

are we shooting darts in the dark in a random market?
can we exploit inefficiencies?
can we forecast the future via statistical representations of price movements?

Although I have my views on the matter I want to open a discussion about it.

some academics think that the masses flock to TA due to ignorance and laziness....due to it is easier to try to find patterns in a chart even if you do not know exactly what you are looking at.

some technicians believe all you need is a chart, all else is mental masturbation.

what are your views....newbie,wannabes, experts all ideas welcomed.

Hi Red Lion,

OK im 3 years in to trading. Making a little money, but not consistently enough or enough to live off. So I'm probably an Intermediate type of trader.

My views: EMH vs Behavioral markets:

Well I'm off the opinion that current markets are a combination of both. They are efficient or they wouldn't exist. Why would you host a game you can't win ?
The behaviour is induced by hype and hysteria. Again how would you win a game that you host ? Introduce panic and hysteria.

Long term trading vs Short term trading:

I dabble with both, seem to be more successful in making money from short term but make better decisions in long term. I find it difficult to hold a position for long term as in more then a week. I think however that the short term influences the long term more then the other way around. A new fad or trend will begin now and then spread for how long?

Investing and understanding economics and fundamental analysis
trading and technical analysis:


I think having a degree in business studies would definitely help your trading beyond normal techs. I don't have one but when an important decision is made just go with it. Example when AUD adjusts interest rates just go with it. If you get concerned with an entry you miss the trade. If there is clear direction just do it. If you were wealthy enough to just trade the important fundamental decisions, like a hand full a year you wouldn't need TA.


does price have a memory? no memory? does the market care about momentum? or is it all discounted in the price at every second it is quoted?


It sure does have memory just look left: It only cares about its own momentum not yours or mine. Notice moves are done in like 15-60 mins typically.You and I are not suppose to board the train.


are we shooting darts in the dark in a random market?
can we exploit inefficiencies?
can we forecast the future via statistical representations of price movements?


Nothing is random, only the retail entries. Think about it your hosting the game and no ones playing what do you do besides sit on your hands ?

Now we have players entering, cool, OK lets play..a little sideways, a little up, a little down, do we have enough positions collected? If no lets keep going some more hours, if yes lets do the math, we make 10 billion going up or 6 billion going down, I think we go up !!! It's that easy...

You only win if your on the right side of that play:


some technicians believe all you need is a chart, all else is mental masturbation.

The chart is the only tool we have but the mind can do incredible things if it can remain rational.

In a nutshell the majority will always lose, they have to or the game makers are out of business. That can't happen because they have the money.
Imagine playing a fun game of markets with a bunch of people and your the bank. You sit and watch where they position themselves then you make the sweep that takes the most cash, does any TA really matter ?

Cheers

One of rentech founders who was an ibm programmer said the bulk of their profits come from patterns that dont make sense.

I started out as a short-term trader but I'm coming to the realization that if I want to make a living out of forex trading, I have to be a long-term trader.

Short-term trading is too stressful and emotional. Also, it's difficult to filter out noise and focus on real, significant trends if you're a day trader.

You do have to have a lot of patience to be a long-term trader, though, but I think patience is the name of the game.

most of the time the market is in conflict with itself.it has no agreement,orders from a multple of participents conflict for there own purpose.

occasionally the majority of interests are the same,this shows in the patterns that most retail traders trade from,this shows as harmoney ,as one of agreement.these are the times we should be trading,

the problem for most of us,we dont reconise these times or we are to impatient .
regarding the overall randomness,yes most of the time it is,but for no other reason than that of conflicting orders for individual participents own interests.

i also believe it adheres to order,in its maths