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why have you accepted the price-predictability assumption?

  • #461
  • Dec 27, 2013 9:59am Dec 27, 2013 9:59am
Quoting Turveyd
{quote} Dude, we can all draw lines on after the event with 100% accuracy, how about calling some live ?
Dude, how's about going back through my historical posts and charts.

This isn't the hindsight wizardry of all of the FF trading systems...these are critical print market areas.

Use the same indicator, draw the same lines in live and then see if you can see what I see.

My father lent me a little saying a while back, wasn't applied to trading, but more so applied to just life in general:

"If you keep doing what you keep doing, you will keep getting what you keep getting".

Much in the same way that Einstein stated:

"Lunacy is loosely defined as doing the same thing over and over and expecting different results".

These are typically seen as negatives...in trading like a lot of other worthwhile habits, they are the keys to success.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #462
  • Dec 27, 2013 10:13am Dec 27, 2013 10:13am
Quoting seeyouinNY
Efficiency markets never exist (there isn't one in the entire world) - that's the joke They're a model of how markets should operate, but never will.
Maybe you have a point there.But we still cannot know it for sure, i`m pretty confident that the market is efficient, in some periods , when an external influence is missing.That external influence is for example a news release, which causes a big red/green candle followed immediately by a pullback to the ground state.

And a longer time inneficiency caused by fundamental factors which is known as a trend.

Both are inneficient and both are predictable, yet when these 2 are missing, the market is just unbiased random mess.

Quoting PipMeUp
All this debate about random vs pseudo-random is non sense. This is a non-issue. We are using a few millions bits of data. That's a ridiculously small sample. Proximus results are bad because he is using a uniform distribution. Full stop. Let's move forward. Yes random and uniform can be put in the same sentence. Yes a random walk can go anywhere and will generate trends. Yes the ratio of heads and tails for a fair coin converges towards 1. But the difference between the number of heads and tails can be arbitrarily big. This number follows a random...
Glad that we can close that subject

Lets move on.

So you are saying the market is distributed either as a cauchy distribution or a student t distribution or something similar.

I dont know about the student t, but the cauchy is a continuous distribution, where as the market is not continuous.Sure viewed from large its a continuous line, but it comes in discrete packets, or ticks.And its not just because the broker has crappy connection, but rather how it is calculated.

We must take a look now how is the market made:

Forex is decentralized, it has no central authority dictating the exchange rates, so every bank or group of bank estimates the likely price, or if the bank is a market maker then it uses matching orders algorithm to connect buyers and sellers, and the threshold of the impact of the buyers and sellers will steer the market in one way or the other.So given that this algoritm is a computational progress, it cant be continuous because the computers need some time to evaluate the prices.And also by the time the info gets to the broker, the lag could be from several miliseconds to several seconds by the info gets to you.

So the market is discrete, no doubt about it.

We need a distribution which is not continuous.

Does the market have infinite variance?

I don't think so.Because it depends on the money supply.The size of market swings is directly proportional to the size of the money supply.If the money is inflated then more and more people can participate, therefore more traders, more liquidity, more volatility, bigger swings and a bigger variance.

Why do you think the gold started rising right after the US started printing more money? if the money supply would be constand, then probably no large trends could emerge.

So i`m pretty sure unless the mints print infinite money, the variance of the market is a variable,which may increase as the money supply or decrease locally with the money supply, but its not infinite.

Yet its unknown, if you'd know it then it would be very simple to trade the market, just put the stoploss outside the max variance level and you could technically never lose a single trade.

Is the market autoregressive?

Partially.You can predict somewhat the price from past correlations, but you also need external information to trade it effectively, thus without economic information you cant do much.
"There's a sucker born every minute" - P.T. Barnum
  • #463
  • Dec 27, 2013 10:20am Dec 27, 2013 10:20am
Quoting Proximus
You can predict somewhat the price from past correlations, but you also need external information to trade it effectively, thus without economic information you cant do much.
No ya don't.

If price was based on press, you'd have an incredibly tough time buying below predetermined market price and finding a buyer when you wanted to exit.

It would assume absolutes, within fractions of trades that would offer no opportunity nor prosperity to a retail market.

If this actually happened...there'd be no market, because there'd be no traders.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #464
  • Dec 27, 2013 10:28am Dec 27, 2013 10:28am
Quoting Magix
{quote} No ya don't. If price was based on press, you'd have an incredibly tough time buying below predetermined market price and finding a buyer when you wanted to exit. It would assume absolutes, within fractions of trades that would offer no opportunity nor prosperity to a retail market. If this actually happened...there'd be no market, because there'd be no traders.
Doesnt neccesary have to be like that.Take GOLD for example from 2001 to 2012 when its was very bullish.

Big traders were buying the gold, but how could they buy it if nobody was selling it?

There must not be equal amounts of traders to trade an instrument so 1 big trader can trade vs 1000 retail trader.

But there must be equal amounts of position sizes in each trade, so 1 big trader with 1 million dollar buys gold, where as 1000 small traders with 1000 dollar each will sell the gold.And there you go a big trade.

Of course in my experience this would be bearish.

On the other hand what i think happened with the gold was exactly the opposite.

Many small retail traders bought the gold because they were fooled by news, yes some of them got much money, but those who started buying after 2011 got f****, why? Because many small traders bought it in small positions, thus making prices high and high, while the big traders were selling it, and after 2012 you can just see the bearish moves there, like if someone was just hitting a takeprofit and closing its sell trades.So about 3 years gold rise was ereased by 1 year gold fall.

The big sharks were waiting for the small fish to take the bait and they did it.

So that proves that you can trade a big bearish move even with an opposite trade, because you did many small buys while 1 big trader did a huge sell.The position sizes were equal, so the orders can be matched.
"There's a sucker born every minute" - P.T. Barnum
  • #465
  • Dec 27, 2013 10:33am Dec 27, 2013 10:33am
Quoting Proximus
{quote} Doesnt neccesary have to be like that.Take GOLD for example from 2001 to 2012 when its was very bullish. Big traders were buying the gold, but how could they buy it if nobody was selling it? There must not be equal amounts of traders to trade an instrument so 1 big trader can trade vs 1000 retail trader. But there must be equal amounts of position sizes in each trade, so 1 big trader with 1 million dollar buys gold, where as 1000 small traders with 1000 dollar each will sell the gold.And there you go a big trade. Of course in my experience...
This has absolutely ZERO to do with:

Quoting Proximus
Partially.You can predict somewhat the price from past correlations, but you also need external information to trade it effectively, thus without economic information you cant do much.
And these are your thoughts...your mind is fast becoming a top 10 place I hope to never find myself.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #466
  • Dec 27, 2013 10:42am Dec 27, 2013 10:42am
Quoting Magix
{quote} This has absolutely ZERO to do with: {quote} And these are your thoughts...your mind is fast becoming a top 10 place I hope to never find myself.
Ok i maybe formulated the things unclear.

Let me clarify, my point was that past correlations influence the new data, because you just read the inneficiency from there.You got a trend, you know where it will head.

If you just got into trading in 2001 and you would see the big gold rise what would you do? It would be obvious that you would join the bulls too right?

So by just seeing that uptrend you can decide in which direction to trade.

But if you also check the news, and research a bit on the current world economy you have a better picture.If there wasn for the Iraq war , then the gold rise would have stopped after 2003-2004.Yet it continued until 2012, because 2007 crisis and other bad stuff.So the news and the current world economy is a valuable asset.

But of course you could trade the market only by relying on technical analysis, since i can point out many inneficiencies which have nothing to do or less to do with fundamentals.But the big fundamentals cause the bigger inneficiency ,so i would certainly check the news from time to time.
"There's a sucker born every minute" - P.T. Barnum
  • #467
  • Dec 27, 2013 10:49am Dec 27, 2013 10:49am
If you have people buying and nobody selling then the price moves upto a level where there are sellers, it does not require volume to move the market, just inbalance.


This is basic stuff. Come on people.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #468
  • Dec 27, 2013 10:52am Dec 27, 2013 10:52am
Quoting Turveyd
If you have people buying and nobody selling
I`m 100% certain that's impossible.The market itself needs participants, without selling nobody can buy AND without buying nobody can sell?

If you go to your clothes shop and nobody sells a jacket, then how can you buy the jacket?
"There's a sucker born every minute" - P.T. Barnum
  • #469
  • Dec 27, 2013 10:56am Dec 27, 2013 10:56am
Quoting Proximus
But the big fundamentals cause the bigger inneficiency ,so i would certainly check the news from time to time.
Tell this to the USD Bulls in the EURUSD thread.

A lot of them poor bitches lost their SHORTS hammering down on the EURO into EOY.

After I gave them a little Pattern recognition and 2 solid reasons not to.

HERE.

See Chart HERE.

I don't even pay attention to my local news, much past weather, as it is the only REAL thing that can have an impact on my today and tomorrow...unfortunately, where this data has gotten a lot more accurate and relevant, fundamentals as applied to Forex, haven't. Take how a single event will affect currency globally? Toss a coin, betcha have equal if not better results. The coin toss is at least random enough to be statistically relevant...market reaction...not so much.

An object in motion tends to stay in motion. Basic physics...apply this to market and it will give you a lot better results than all the press in the world.
Attached Image (click to enlarge)
Click to Enlarge Name: euy.png Size: 31 KB
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #470
  • Dec 27, 2013 10:58am Dec 27, 2013 10:58am
Quoting Turveyd
If you have people buying and nobody selling then the price moves upto a level where there are sellers, it does not require volume to move the market, just inbalance. This is basic stuff. Come on people.
Stock market, yes.

FX market...cummon turv...Really?

Do ya know why there are no level2 FX traders?
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #471
  • Dec 27, 2013 11:03am Dec 27, 2013 11:03am
Quoting Magix
{quote} Tell this to the USD Bulls in the EURUSD thread. A lot of them poor bitches lost their SHORTS hammering down on the EURO into EOY. After I gave them a little Pattern recognition and 2 solid reasons not to. HERE. See Chart HERE. I don't even pay attention to my local news, much past weather, as it is the only REAL thing that can have an impact on my today and tomorrow...unfortunately, where this data has gotten a lot more accurate and relevant. Take how a single even...


I didnt say the news will give you the direction.Or they are always accurate.Maybe i would check the news and take the exact opposite, have you thought about that?

If people look at CNN financial report or whatever and see, oh boy the DOW will rise, 99% will buy the DOW, and since the majority of traders lose = therefore the 99% which buy the DOW will fail.So i will be smart and SELL the DOW, and go home with the big bucks.Its just trading smart
Thats how big boys trade.

Or dont trade at all.If the news doesnt give me a clear direction, i can save my trade, and skip it.For example if the economy of both coutries are bad, where i want to trade their currency, if i was only a technical trader, i would have a 50-50 situation, which is not very good.

So i will skip that trade, and come back when i have better odds.So news in not all cases tell you what to do, but in most cases they tell you what not to do.Or they just give you a big picture, its always good to stay informed when trading
"There's a sucker born every minute" - P.T. Barnum
  • #472
  • Dec 27, 2013 11:08am Dec 27, 2013 11:08am
Quoting Proximus
Maybe i would check the news and take the exact opposite, have you thought about that?
How's bout learning to read a chart?

Wouldn't that be easier?

Quoting Proximus
Or dont trade at all.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #473
  • Dec 27, 2013 11:14am Dec 27, 2013 11:14am
Quoting Magix
{quote} How's bout learning to read a chart? Wouldn't that be easier? {quote}
Sometimes the chart is confusing aswell.When the market is completely efficient, i cant extract any information from it soley by looking at it.I must need extra information.

And the news sometimes comes handy.

I once read an article how hedge funds trade the markets.Some of them have a twitter reading robot, which reads all twitter posts about finances in real time and sort them out according to what the popular opinion is about a currency.So if they come out with a 70% twitter posts are bullish on EUR/USD and 30% are bearish, they join the bears too, because they know that the majority is always wrong.

Maybe sometimes its inaccurate and misleading, but if HF use them, it cant be that bad.
"There's a sucker born every minute" - P.T. Barnum
  • #474
  • Dec 27, 2013 11:19am Dec 27, 2013 11:19am
Hey Turv...

You might like this one...

As we chatted about in measuring a Move by a 20/200EMA cross on the M1...

Here's that 200 pip move off the cross.

Attached Image (click to enlarge)
Click to Enlarge Name: eu200.png Size: 25 KB
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #475
  • Dec 27, 2013 11:25am Dec 27, 2013 11:25am
Quoting Proximus
{quote} Sometimes the chart is confusing aswell.When the market is completely efficient, i cant extract any information from it soley by looking at it.I must need extra information. And the news sometimes comes handy. I once read an article how hedge funds trade the markets.Some of them have a twitter reading robot, which reads all twitter posts about finances in real time and sort them out according to what the popular opinion is about a currency.So if they come out with a 70% twitter posts are bullish on EUR/USD and 30% are bearish, they join...
You seem to be looking for every reason in the world to not work with a technical analysis.

Going on:
Markets are Random
News needs to be present
Hedge funds use Twitter Bots.

Of anything, all I can see is that you are the least qualified person to have entered a post on the subject of this thread. If you don't understand markets...that's fine...I get it...

But how does any of the Tripe you have posted here, up until this last offering, have anything to do with:

why have you accepted the price-predictability assumption?
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #476
  • Dec 27, 2013 11:39am Dec 27, 2013 11:39am
Quoting Magix
{quote} You seem to be looking for every reason in the world to not work with a technical analysis. Going on: Markets are Random News needs to be present Hedge funds use Twitter Bots. Of anything, all I can see is that you are the least qualified person to have entered a post on the subject of this thread. If you don't understand markets...that's fine...I get it... But how does any of the Tripe you have posted here, up until this last offering, have anything to do with: why have you accepted the price-predictability assumption?
I think you are exxagerating a little bit.

Markets are random, thats confirmed by the majority of guys who posted on this thread, so it wasnt only my idea.If you cant deal with that, so be it.I said randomness != unpredictability

News need to be present ? Nope i didnt said this aswell, if you carefully read my previous posts, i only said that news will enhance your trading ability or help you out in difficult decisions, but i also said that you can find other inneficiencies aswell by completely ignoring fundamentals.Of course i would not recommend complete ignoring of fundamentals, but it would theoretically work that way too.

It's much harder to be only a technical analyst, and since i`m an algorithmic technical analyst, i have to do this aswell.Whel i trade manually then its easy to check news and pick the best information from it.But teaching an EA to do the same is much harder, so for an algorithmic trader is more practical to only look at technicals.

If HF use twitter bots, thats irrelevant, some people use all-in, all advantages to trade the markets.I only need a small edge to be always victorious, but that edge should be reachable and practical.A twitter bot needs a very fast pc to compute all that junk data in a few miliseconds.For example a GDP news release, you get your twitter bot and read the posts about 5-10 seconds before the news release could give you a good direction where the news is headed.

If i were a HF i would use that too, but as a retail trader, i`m not interested in that.

Quote
why have you accepted the price-predictability assumption?

This is very easy to answer, because if this was not true, then nobody could make a single dime out of the market, except the brokers with their spread.This was concluded in the first posts.

The last 400 posts of this thread was discussing how to predict the market, and that was the topic i was adressing also
"There's a sucker born every minute" - P.T. Barnum
  • #477
  • Dec 27, 2013 11:47am Dec 27, 2013 11:47am
Quoting Proximus
{quote} I think you are exxagerating a little bit.

Not really...in answer to the question:
why have you accepted the price-predictability assumption?

You response is, "I don't". Just took you a really long time to get here.

You are still lost...

And then there is:
Quoting Proximus
{quote} Yes i do because i know that fundamentals are present in the market and are not present in my random data, so the bias in the market is caused by fundamentals.

You either require fundamentals or you don't...


At this point, you have straddled both sides of the fence.




Because others don't look for the same things that I do, in this non-random place, doesn't mean that it is random, just means that they haven't yet come to the same conclusions. I don't trade on the popular majority, I trade based on the Techs.


I have stated my reasons for accepting price-predictability...
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #478
  • Dec 27, 2013 11:50am Dec 27, 2013 11:50am
Quoting Proximus
{quote} Forex is decentralized, it has no central authority dictating the exchange rates.
I'm sorry, but I got to this point in your post and stopped reading. The point I isolated is not true. The forex exchange is decentralized, but exchange rates are often controlled by a central authority -- the currency's central bank or its national treasury. Some exchange rates are extremely manipulated (e.g., China is "fixed" within a tight range, Switzerland is pegged, Australia and Japan have been "correcting" their valuations in 2013). Most others trade freely until that central authority detects unwarranted or unwelcome activities, then they step in.
  • #479
  • Dec 27, 2013 11:52am Dec 27, 2013 11:52am
Quoting Magix
{quote} This was exactly my point in that there really is, no point. Without knowing trade pair, sessions when the data gets printed and even down to the day of the week, they are irrelevant. An fruitless quest.
Agreed.
  • #480
  • Edited 12:09pm Dec 27, 2013 11:56am | Edited 12:09pm
Quoting GEfx
{quote} I'm sorry, but I got to this point in your post and stopped reading. The point I isolated is not true. The forex exchange is decentralized, but exchange rates are often controlled by a central authority -- the currency's central bank or its national treasury. Some exchange rates are extremely manipulated (e.g., China is "fixed" within a tight range, Switzerland is pegged, Australia and Japan have been "correcting" their valuations in 2013). Most others trade freely until that central authority detects unwarranted or unwelcome activities,...
Good point but central banks cannot always reach their goals (a few pages ago or in another thread i dont remember back i was addressing a point when CB stepped in and cant manipulate the market because the market had other plans for itself).The yen for example is in deflation for decades now, and their central bank cant do sh*t about it.Manipulation is not a honest thing, so the controlling influence is always there but the forex market has a much higher degree of freedom because of its decentralized aspect than a stock index.

edit: here it is : http://www.forexfactory.com/showthre...12#post7171012

There is a difference between :


-Direct controlling (stock market) -> a clever hacker hacks in to a stock market network and can mess up all rates when its routed through it

-And an indirect control , a CB or a Mint will TRY to manipulate the rates, with more or less success
"There's a sucker born every minute" - P.T. Barnum
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