My feeling on price movements - they are random

hi all,

Please correct me if i wrong
this is what i feel from the past few months i am demo-ing

the price is random at it's own,
is an independent 'lifeform'

the price move where ever they like
no combination of indicators can predict where they will move
(indicators just calculation based on past price)

no candle stick patterns or chart patterns can predict their movement,
they are independent and will move where ever they like..


no news can move the price too,
they might choose to go along the news,
or they can choose to move the other direction too,


big players can move the price a bit,
like the governments, institutional traders, etc...



the price is totally random,

every system that have money management in place, will sort of works in trading..

is this true?

I believe its not possible to prove that the market is random.
You have to prove the proposed theory:
The market is random.
Or disprove it by proving that there the market has patterns.
The problem is you can often find patterns in pure randomness.
And it is often easier to disprove a hypothesis than to prove one.

That being said its better to treat the market as a random one than to treat it as one having a pattern as the price to pay with be less costly if we are wrong.

Not all systems work, only those with positive edge.

ooh.. forgotten to mention, elliot wave...
is not much use as for me
( i believe there are experienced user who using it)

we can only know what wave it is after it's happened
and if we read more detail, any pattern can be said as elliott wave



and goodman wave.. so far some times it's true, for me
but also around 50% of the times only..


i feel that the price are random and does not follow certain wave pattern

You have to define what random is.

If by random you mean that the market move totally random without reasons and withoutrules, i think this is wrong.

If by random you mean that there is always a random "stuff", and there is no pattern that could anticipate some event (a move) with 100% accurancy, you are right.

Price is not random. Price/the market is not a lifeform of its own with random properties - every time price moves it's because people or programs have consumed or removed or added liquidity. This is generally not done randomly but for specific reasons, or following specific rules. All together though they may appear to be random, but ultimately they're not.

You are right to an extent - if someone(s) decide to buy or sell enough to move price, it will move regardless of what your patterns or indicators say it "should" do. The market only moves (up) when there is more buying than there is available liquidity on offer at the price (not counting removal of liquidity on offer without it being consumed). If enough people (with enough money) buy due to a certain pattern or indicator, they *could* move price - but if they're not buying, price won't move as your indicators say it should, so ultimately your indicator has no effect on the movement of price and can't predict sh*t. What moves price is buyers and sellers, and all the indicators and patterns in the world don't mean sh*t unless they happen to conincide with where the buyers are buying or sellers are selling.

The market is not random. When you go to the shopping mall can you predict what everyone will be wearing? If it was a hot day what are the chances of everyone there will be wearing blue shorts and a gray T shirt that says "Cindy xxxx is a nob"? What are the chances you will see just 2 people wearing the same thing?

Slim to none! and you might call the choice of clothes people wear at the mall random and I guess you would be right. Why? Cause everybodies different and because of this make very different decisions. Same as people trading, everyones different and will make different decisions everyday, this is what creates seemingly random action.

What is predicatable? That 1) there WILL be people at the mall, 2) saturday will be more crowded than wednsday, 3) things will be bought and things will be sold, 4) people are more likely to wear shorts on a hot day. 5) Most people will turn up in cars.

Just gotta roll with it. Theres rules and systems in place that take orders and distribute the liquidity so you can't say the markets random, otherwise it would just go up and down for no good reason. Theres always a reason and its the simple process of what Eurotrash desribed above.

People want to see that when "x" does "Y" "T" will do "O". But thats like saying when Billy rcks up to the mall in balck sabbatth T shirt Jane will be there 15m later in a nightgown. Screw that all I know is when Billy rocks up to th mall, regardless of what hes wearing he shopping. If its hot chances are he will be wearing shorts.

Nothing in this world is randon. Every action has a cause. Same with market. Market is going up means more people are buying. Nothing is random.

Sam,

No one knows where the market will go...all we can do as traders is put the odds in are favor.

Having a trading plan and keen risk mangement will make you successful.


-Mike

Don't be fooled no one in there right mind is gonna risk millions of dollars just for some crappy 60% win ratio, they know exactly where price will go and they will make it go there. The dollar is not valued the way it is just because it randomly arrived at that price...come on now think!

Just because you can't predict with 100% accuracy an event doesn't mean that it's random. The market is based on probabilities. Patterns work, but what they give you is not an exact answer as to where the market is going to move next. They give you the most probable direction, with x percent of accuracy (based on statistical analysis of history). If markets were random you would have always a 50% chance of winning or losing, there would be no edge for any strategy or system.

It's random when it takes your money.
It's perfect order when you extract a few pips
Which do you want ?

just draw hundred of support and resistance areas on different charts and come again and tell me price action is random.


price is not random although it appears to be that way. Everything happens for a reason. The market is made out of people's perceptions.

Price is not random, it consist of ranging, trending, big and small wave, with different number of volatility. So you would see and assume it is random.

Sometimes you see the chart, you would notice this method works, but another time being you see another method works. If you can cut the price chart part by part, such as Asian/London/NY session, then you can see why it isn't random, the price has purpose.

I have done trend analysis before for one time frame, to see the average pips of trend to be maintained before new trend appear. I can prove that trend in bigger time frame will stay longer than smaller time frame for the same setting of trend indicator. So this is one of the evidence to show price is not random. You can check my thread "Analysis" about this.

From my study, it is impossible to predict the next move in smaller time frame without the information from bigger time frame. This is why to buy back the main trend, and trader can earn money. However, I did try to build 100% setup, but it is impossible, because you will make at least one wrong trade if new trend appear (Because you stick to main trend). The root cause is smaller time frame lead first for new trend in the case.

They are random to a certain degree, some moves can be predicted with high accuracy.