Price CANNOT be random | Forex Factory

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Price CANNOT be random

  • #1
  • First Post: Edited 10:24pm Aug 12, 2013 9:23am | Edited 10:24pm
I'm taking a break from trading, so I got a bit more time to think and to write.

I'll start with the usual disclaimer: I'm sharing stuff and starting threads with pure intention to help my fellow traders. But it is only an offer, not a duress, not a threat. So if you don't like it, or you don't like me, absolutely no one is asking you to read it.

So, price is told to be random per conventional wisdom. There is no way you'll be able to tell where the future direction will be they say.

Let's start with the foolish argument against that statement.

ran·dom

/ˈrandəm/
Adjective

  1. Made, done, happening, or chosen without method or conscious decision: "a random sample of 100 households".
  2. Governed by or involving equal chances for each item.

If price is really random then for one second EU can be at 1.3000, and the next at 0.8000, the next at 25.9786. That's random. And stupid way to interpret it.

Some gambling retail traders often gamble their money away because they know price is random, but technical indicators somehow give comfort, and they trade away.

For real retail traders you CANNOT afford to think that price is random. No. There is order, there is cycle, there is pattern in any financial market.

If price is random, would banks and large institutions gamble their billions?

Would big boys say "Let's put our real money worth about $1 billion (which is about 20% of our profit this year) into this currency pair, and just see what happens. We might get lucky. We might lose it all. Randomness is exciting isn't it?"

No. No matter how many books, textbooks, academic journals, articles by gurus and experts, who enforce the belief that price is moving in random fashion, price is a consciously controlled mechanism, used by the powerful, to benefit the few.

I'll talk more about this as this thread develops.

  • #2
  • Aug 12, 2013 10:47am Aug 12, 2013 10:47am
great post!
for me "random" means I don't know where price will be at the end of the day.
will it go up...or down? for 30pipis or 200 pips?
I believe there's structure in the market...if not what are we trying to exploit?
  • #3
  • Aug 12, 2013 10:59am Aug 12, 2013 10:59am
Quoting Ishtana
I'm taking a break from trading, so I got a bit more time to think and to write. I'll start with the usual disclaimer: I'm sharing stuff and starting threads with pure intention to help my fellow traders. But it is only an offer, not a duress, not a threat. So if you don't like it, or you don't like me, absolutely no one is asking you to read it. So, price is told be random per conventional wisdom. There is no way you'll be able to tell where the future direction will be they say. Let's start with the foolish argument against that statement....
This is not some grand revelation. I don't know what "traders" you have spoken with, but "price is told [to] be random" is NOT conventional wisdom. What's next... water is wet?
  • #4
  • Aug 12, 2013 11:19am Aug 12, 2013 11:19am
Price CANNOT be random... how did you know the ultimate secret... The uninformed traders might read this the banks and large institution would not be happy . They might even prevent you from trading because of what you know .
If price is Random I wouldn't be in Trading forex . As you said "For real retail traders you CANNOT afford to think that price is random. No. There is order, there is cycle, there is pattern in any financial market", and you are right about that but people have different views/personality/perspective of market.


PRICE MIGHT NOT BE RANDOM BUT CAN HAVE MULTIPLE INTERPRETATION, PEOPLE TRADE WHAT THEY BELIEVE.
"I made money every time you place your Stop loss too close to ME"
  • #5
  • Aug 12, 2013 12:02pm Aug 12, 2013 12:02pm
Quoting Ishtana
I'm taking a break from trading, so I got a bit more time to think and to write. I'll start with the usual disclaimer: I'm sharing stuff and starting threads with pure intention to help my fellow traders. But it is only an offer, not a duress, not a threat. So if you don't like it, or you don't like me, absolutely no one is asking you to read it. So, price is told be random per conventional wisdom. There is no way you'll be able to tell where the future direction will be they say. Let's start with the foolish argument against that statement. ran·dom...

I think slightly diffrently
At smaller TF 1,5min ,15, even 30 min price can and often does act randomly.
That is it fluctuates on mico waves difficult to predict and this is why scalpers in most cases fail.
As more time is given price starts to make sense.
I trade 4hr,daily,weekly and swing trading mostly.
In trading, you have to be defensive and aggressive at the same time
  • #6
  • Aug 12, 2013 12:03pm Aug 12, 2013 12:03pm
I'm a programmer and developing a program to predict the future price
by separate each cycle and each wave with many methods and many wave form
I work developing it from three years till now

this is what it can do
this is the predict at eurusd M30 at 03/08/2013
Attached Image (click to enlarge)
Click to Enlarge Name: 378225d1375582744-t15.png Size: 103 KB

and this is the result next day
Attached Image (click to enlarge)
Click to Enlarge Name: 378431d1375739556-t15r.png Size: 137 KB

source:
http://forum.arabictrader.com/t14277...ml#post2691921
  • #7
  • Aug 12, 2013 12:30pm Aug 12, 2013 12:30pm
Quoting remon78eg
I'm a programmer and developing a program to predict the future price by separate each cycle and each wave with many methods and many wave form I work developing it from three years till now this is what it can do this is the predict at eurusd M30 at 03/08/2013 {image} and this is the result next day {image} source: http://forum.arabictrader.com/t14277...ml#post2691921

I hope you also post as many graphs showing price did not match with your prediction.I am sure you got those as well.
Regards
In trading, you have to be defensive and aggressive at the same time
  • #8
  • Aug 12, 2013 12:30pm Aug 12, 2013 12:30pm
I think that the market can act almost randomly for extended periods of time, but as soon as a trend starts it stops being random. A long trend is the negation of randomness. Long trends in forex are created by fundamental factors between countries, I don't think a theory of random prices can explain them. Also, each pair has it's own "personality" that can last for several years. A random theory can't explain that either. If markets were really random nobody could profit from it in the long term, there would be no real edge.
  • #9
  • Aug 12, 2013 12:39pm Aug 12, 2013 12:39pm
Quoting remon78eg
I'm a programmer and developing a program to predict the future price by separate each cycle and each wave with many methods and many wave form I work developing it from three years till now this is what it can do this is the predict at eurusd M30 at 03/08/2013 {image} and this is the result next day {image} source: http://forum.arabictrader.com/t14277...ml#post2691921
If you are a programer you rather calcuate the future price. You need to be witch to predict.....
JacekPreserve Precious Capital
  • #10
  • Aug 12, 2013 1:07pm Aug 12, 2013 1:07pm
Could you please tell me more about this software? I find this fascinating but don't quite understand. If it works the way you show, you can be a very rich man!

Quoting remon78eg
I'm a programmer and developing a program to predict the future price by separate each cycle and each wave with many methods and many wave form I work developing it from three years till now this is what it can do this is the predict at eurusd M30 at 03/08/2013 {image} and this is the result next day {image} source: http://forum.arabictrader.com/t14277...ml#post2691921
  • #11
  • Aug 12, 2013 1:16pm Aug 12, 2013 1:16pm
Quoting vsaxena
Could you please tell me more about this software? I find this fascinating but don't quite understand. If it works the way you show, you can be a very rich man! {quote}
I'm sure it works the way he shows some times, and then some other times it doesn't work, like any other indicator. You would need to backtest the indicator to know how accurate it is. One chart doesn't mean anything.
  • #12
  • Aug 12, 2013 2:28pm Aug 12, 2013 2:28pm
Price is Not Random ! Pip by Pip of this Prices are Dsigned ! and It Can Be Predictable at some Areas Called Gaps !
We have Gap in Price and Time When Gap be Huge Price Must Back or Move to Gap before Any Other Important Move
Some Years ago one of My freinds Show me this but dont say its formola all of He's Trade were Corecct with Hug lots Like 1 -8-300 lot
He said to me We can find this gaps by Geomtry and Mathematical Formolas And when We Find one of this gaps in Market Future Price move to these Gaps
in Avrage in Each Daily Move we have 4 Gaps in Each Pairs sometimes we have 16 Gaps by yestedays move in market and Sometimes we have 2 Gaps
But only Thing that i know is We have Gap in Price and These Gaps Must Fil Before any Other important move in market at least someone Proved it to me 4 years before .
AmirShahiN
You Must Love CandleSticks
  • #13
  • Aug 12, 2013 3:19pm Aug 12, 2013 3:19pm
Quoting remon78eg
I'm a programmer and developing a program to predict the future price by separate each cycle and each wave with many methods and many wave form I work developing it from three years till now this is what it can do this is the predict at eurusd M30 at 03/08/2013 {image} and this is the result next day {image} source: http://forum.arabictrader.com/t14277...ml#post2691921
Hm I thought predictions are performed in the future and not the past?
Trading = a mirror to your human flaws. Fix them or be fixed.
  • #14
  • Aug 12, 2013 3:23pm Aug 12, 2013 3:23pm
Prices are fractal not random.
wo-yoy! wo-yoy! wo-yoy! wo-yoi! wo-yoy-yoy-yoy!
  • #15
  • Aug 12, 2013 6:28pm Aug 12, 2013 6:28pm
You guys are funny. Predicting where price will be with only a historic price chart? What happens when Soros enters and shits all over it? Or when a tsunami hits, terrorist attack, CB puts a floor on a pair... or even... talk of a rate cut!! lol

Price isn't random though it may seem if you compare every 1H, 1min, daily, bar to another. Different traders enter/exit at different times. Rare is the 5min bar that will dictate what most will do. The price chart is the aftermath. The witches who look to it to predict the future will be left burned like the rest!
  • #16
  • Aug 12, 2013 6:36pm Aug 12, 2013 6:36pm
Quoting pemully
Prices are fractal not random.
Simplest answer yet very meaningful one, Prices are definitely Fractals not random .
"I made money every time you place your Stop loss too close to ME"
  • #17
  • Edited 10:22pm Aug 12, 2013 10:08pm | Edited 10:22pm
Indeed, there is a massive difference between not knowing where the price will likely to go and labeling it as moving randomly.

Conventional trading wisdom says the Random Walk Theory applies to all financial market. Here's the formal definition:

Definition of 'Random Walk Theory'
The theory that stock price changes have the same distribution and are independent of each other, so the past movement or trend of a stock price or market cannot be used to predict its future movement.


In short, this is the idea that stocks take a random and unpredictable path. A follower of the random walk theory believes it's impossible to outperform the market without assuming additional risk. Critics of the theory, however, contend that stocks do maintain price trends over time - in other words, that it is possible to outperform the market by carefully selecting entry and exit points for equity investments.

This theory raised a lot of eyebrows in 1973 when author Burton Malkiel wrote "A Random Walk Down Wall Street", which remains on the top-seller list for finance books.

And no, what I said is not a revelation. It's a simple observation, logic, and evidence.

To all the struggling retail forex traders out there, I can say that price is not driven by any kind of indicators, any kind of fundamental analysis, any kind of theory, or any kind of correlation. The price is driven by MONEY, and MONEY alone. Every spread, every price movement, and every gap is never left to chance.

I do not believe in the existence of a "trend." Now that I understand how the market works, trend gives the wrong impression to traders, making them believe trend indicators give them advantage in their trading. I simply know that this "trend" is what the big boys do once they have enough volume and liquidity. But for you to better relate to this idea, notice what happens at the very beginning of the so called trend. There is a repeatable pattern at every turning point, at every currency pairs, and every time frame. A pattern of MONEY grabbing. And to join the trend when it has been confirmed by indicators is way way too late.
  • #18
  • Aug 13, 2013 12:23am Aug 13, 2013 12:23am
Get out of here ,guys! On smaller time frames, under daily, It is all pretty much random, the so called noise because of the automated trading of large institutions( smart money) that gives us such volatility (that wasn+t there b4 the age of online trading for ex). And that's it. It's only not random for big boys in certain conditions because they can news scalp due to direct interbank access of their EA's.
Quote
I do not believe in the existence of a "trend."
You've got to be kidding me, lol. It's good you took a brake with comments like these.
  • #19
  • Aug 13, 2013 12:37am Aug 13, 2013 12:37am
Quoting backinblackl
Get out of here ,guys! On smaller time frames, under daily, It is all pretty much random, the so called noise because of the automated trading of large institutions( smart money) that gives us such volatility (that wasn+t there b4 the age of online trading for ex). And that's it. It's only not random for big boys in certain conditions because they can news scalp due to direct interbank access of their EA's. {quote} You've got to be kidding me, lol. It's good you took a brake with comments like these.

There is no difference beetwin small time frame and big time frame.
Only Time is different, things happen much faster, in much lower period of time... look at those screen shots, witch one is M1 and witch is D1, tell me the difference.
Attached Image

Attached Image
JacekPreserve Precious Capital
  • #20
  • Edited 3:00am Aug 13, 2013 1:10am | Edited 3:00am
Quoting backinblackl
Get out of here ,guys! On smaller time frames, under daily, It is all pretty much random, the so called noise because of the automated trading of large institutions( smart money) that gives us such volatility (that wasn+t there b4 the age of online trading for ex). And that's it. It's only not random for big boys in certain conditions because they can news scalp due to direct interbank access of their EA's. {quote} You've got to be kidding me, lol. It's good you took a brake with comments like these.
It's exactly the same as my own reaction the first time I heard that the market is not trending. Well, statistically, price tends to range more than it trends. And the definition of higher high, higher low and vice versa would surely have cost retail trades millions of dollars. Price actually "shifts" from one zone to another. This is their business model and their cycle. What most traders fail to understand is that:

Forex market is a society of anarchy where the powerful uses brute force to control everything that happens to the price. The biggest mistake a retail traders can do is to enter this exclusive club without knowing anything about them.

I've told everyone several times now, my concept of trading is different and at times opposite of common trading concept, so it's ok if you don't agree with me. But I only go by the evidence, and what people say that I don't understand about the market is irrelevant. My account is growing steadily, and quite rapidly. That's enough evidence for me.
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