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Is random really random? 231 replies

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Do you believe this market is random?

Quoting Exodus
{quote} I have pondered digital filtering, I'm not sure it would mean much. I once constructed a special MACD filter which had a third signal output indicating faster than normal swing, but all you really get is the hair sticking out of the mush. You really need something that can weight the price movements with volume, ...or not. The other thing I thought was to use FFT on the data. That would allow one to learn if there are any conditions that precede sudden movements. Two things put me off using FFT, first it is really difficult to find an algorithm...
It's interesting to apply various mathematical tools to the market, and sometimes there are some interesting results. However, it will always be second to actually understanding the market, which doesn't require mathematical tools.
The market as a whole is composed of data, from which a lot of it is 'fragmented'.

It boils down to knowing what data is relevant, what is fluff.

Isolating the relevant data and splitting it into two groups:

- Data that converges with expected outcomes.
- Data that diverges from expected outcomes.

Within these two groups there is a small but intricate difference between expected and unexpected outcomes. And since price is the result of all expected (and unexpected!) outcomes, it is nothing but the result...it is not the cause for movement.

Analising price by itself is like driving a car by looking at your feet. You dont know what is ahead or behind you.

So it boils down to knowing what to do with the data available to us.
If we dont know what to do or how to do it, then of course it looks random, because you cant make heads or tails of what is going on...hence...random.
Quoting PipMeUp
{quote} What is that green histogram which peaks exactly at the same time there is a dent in the equity curve if that's not a massive increase of the lot size? Can you post or link to the result of the trades, grouped by instrument, in pips, that is before any MM applied? And one more time in this thread, I never said you cannot predict the market. Randomness and predictability and DIFFERENT things.
PipMeUp, sorry at this point i would not discuss IN DEPTH how my trade was made since I consider it is wasting time putting it up on the public forum.
I don't recall I said you said market is unpredictable tho, but i agree with you on the randomness and predictability.

Anyway, I made my point, and I will put this thread at rest. Good weekend and good trading to you.
If u luv happiness, start w/ discomfort, make friends w/ pain and failure.
@FXSayWhat just read your sig.
Carbon-Dioxide: the gas of life! https://youtu.be/ttJBdr6eBuo
Market could be structured but price is random.
What moves the price is the unbalanced consent of all market participants if the current price is considered cheap or expensive.
In order to correctly predict the price you have to get into minds of each market participant and know exactly when and how much they are buying/selling. What they already did does not take you to anywhere.
As Above, So Below
Quoting tashkent
Market could be structured but price is random. What moves the price is the unbalanced consent of all market participants if the current price is considered cheap or expensive. In order to correctly predict the price you have to get into minds of each market participant and know exactly when and how much they are buying/selling. What they already did does not take you to anywhere.
I agree with you!
The real question to be asked is: for each currency, what is based on ? (i mean it's only the economy health output)

So some pairs are more sensitive to minerals, cereals, ...., tourism, ... (not the same importance for import/export as USD is mainly used)
Some are more sensitive to weather troubles (then speculation)
All are sensitive but with different levels to regional troubles (war, embargo, ....) and political calendars

That said, every currency has its own life and sensitivity.
Market would be probably random if we wouldn't have Goldmans and the likes. Until then it is just timberrrr all over.
I think most of the time the market is random and you can't predict where price will go. This is especially true when the market has many trouble areas, traffic instead of large space. And in forex this is usually the case. But only most of the time, not all the time. Some times the price has a bias to go up and down (this doesn't mean it will go for sure up and down, only that it has a bias) and this is where a trader who wants to win should be in the market. You can win with support and resistance but most of traders want to play them as reversals in traffic instead of breakouts in space. Going with the recent momentum is key and cutting your loses short. You place a long trade and then the next bar refuses to go up? Look for get out of the trade. Move your stop loss or get out of the trade. Momentum is the important thing not the trend (don't wait for retests as many say, you are trading against the momentum when you wait for retests). And if you trade when price is ranging probably you are taking random walk trades.

If you want to win stop listening to others, stop reading forums or books and start watching the charts more (the naked charts without any indicators). I wasn't able to find a single good trading book. It's not the support or resistance who makes you a winner, it's the subtilities from your strategy. Most traders who use support and resistance are losing. The reason they are losing is they are not using them as they should and they don't have enough filters (you must be picky to win, you can't expect to take a lot of trades and win). And most of them want to trade intraday. The intraday charts are more difficult than daily charts for many reasons but they are greedy, they want to win more but they end up taking random walk trades.
Quoting FXSayWhat
{quote} 200 words, ZERO punctuation. When you put above possibilities and dozens other possibilities you failed to mention all together with $217 billion retail Forex DAILY volume, do you still think NOTHING IS RANDOM??? Trading is not flipping coins. Trading is not rolling dices.
IN my life and in my mind i believe there is nothing such as the word random even the random memory they name it that way and put in our computers follow a logic .one of the things i raised on and believe there is nothing named random it is a a word word or a wrong meaning any thing have a rule combined things have a a rule and pattern that they follow god created this life with rules and logic any thing have a logic i use only god wish and not god wish in my mind to describe things i fail to understand its rule or logic but that also is wrong it is logic wish .i am sorry you said 200 words and zero some word i think you meant logic you see you are trying to find the logic behind my words because human is a mind as basic that analysis every thing learn and follow his life with logic concerns some things are hard to think from our views like Jeanne and Satan what are them i used logic to understand how they described as small as appearing or big some times and full of energy and move with rules that are more described by axis above down left right like energy containers i think i have reached a logic that they are energy containers that have energy more than there physical size and that that what make them have such capabilities .we are know that when plans reach sonic speed there is a voice like a boom because speed or material which is the plan surpass voice speed so this are just energy containers that super pass there molecule existence with speed .you see know i have some rest and with logic i can find answer to things around us so there is nothing as random it is all logic and sorry this seam to be a more than 2000 words next time i will try to make them much lesser
all have a nice day
focus while relaxed to see better
nobody will accept the randomness because their whole belief system is built on being able to predict the future purely based on price levels in the past.

Hence so many failing retail traders...
tradewith60
Quoting 60minuteman
nobody will accept the randomness because their whole belief system is built on being able to predict the future purely based on price levels in the past. Hence so many failing retail traders...
Well to most randomness signifies a lost cause so of course they will fight the notion.
like totally failure brah
Quoting simonb
{quote} Well to most randomness signifies a lost cause so of course they will fight the notion.
strange that in other business people can embrace the uncertainty of the markets they work in, but in trading they do the opposite..
tradewith60
Quoting 60minuteman
nobody will accept the randomness because their whole belief system is built on being able to predict the future purely based on price levels in the past. Hence so many failing retail traders...
That's funny, because I think people embrace the randomness idea to explain their trading performance. IMHO, the real issue is: can you identify market patterns as they are developing (actually, it's best to anticipate them before they develop), and can you account for the possibility that you are wrong before you enter a trade. Patterns develop for a reason. One path to trading success is to study the market, its processes, the patterns that develop as a result of these processes, the key market players and the role they play in the market, when these players are most likely to be in the market, etc. Success in trading depends on not spending time wondering or worrying about randomness.
Quoting GEfx
{quote} That's funny, because I think people embrace the randomness idea to explain their trading performance. IMHO, the real issue is: can you identify market patterns as they are developing (actually, it's best to anticipate them before they develop), and can you account for the possibility that you are wrong before you enter a trade. Patterns develop for a reason. One path to trading success is to study the market, its processes, the patterns that develop as a result of these processes, the key market players and the role they play in the market,...
I personally think it is much easier to trade without doing any of that predicting the future based on the past stuff.
your way is certainly the most popular but also generates the greatest number of failures if this forum is anything to go by,

(p.s what makes you think people embrace it, based on this thread most people don't even think it exists ever??)

tradewith60
Quoting 60minuteman
{quote} I personally think it is much easier to trade without doing any of that predicting the future based on the past stuff. your way is certainly the most popular but also generates the greatest number of failures if this forum is anything to go by, (p.s what makes you think people embrace it, based on this thread most people don't even think it exists ever??)
I don't think anyone on this thread has described a trading approach like mine, and the "your way" comment is made without an understanding of what I do. And as for people on this thread, I was talking to those who embrace the notion of randomness as an excuse rather than a reason.
Quoting GEfx
{quote} I don't think anyone on this thread has described a trading approach like mine, and the "your way" comment is made without an understanding of what I do. And as for people on this thread, I was talking to those who embrace the notion of randomness as an excuse rather than a reason.
I didn't mean any offence, just thought you made it fairly clear you read patterns and from them determine a direction to trade. As for what determines success in the market, that can only be your opinion, success is winning more than you lose, it's impossible for one way to determine that.

As for using randomness as an excuse, never heard that as everyone here is a winner.
tradewith60
Quoting 60minuteman
{quote} I didn't mean any offence, just thought you made it fairly clear you read patterns and from them determine a direction to trade. As for what determines success in the market, that can only be your opinion, success is winning more than you lose, it's impossible for one way to determine that. As for using randomness as an excuse, never heard that as everyone here is a winner.
No offence taken. I hope I did not make it clear about reading patterns. It's more than just patterns. As I've previously stated, it's market structure, and patterns make up a portion of structure. As for finding success, I was pointing out "one path", not the only path. Good trading!
if you think about it, just as when people talk at the same time it creates nonsense(noise).... people on the market think and trade differently which create the market randomness... so yes the market is random... other wise it would respect e.g S/R levels to the pip all the time.
DON'T TRADE THE DIRECTION, TRADE THE MOVE
  • Post #680
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  • Edited Jul 19, 2014 2:45am Jul 18, 2014 6:01pm | Edited Jul 19, 2014 2:45am
Quoting Pipomagic
if you think about it, just as when people talk at the same time it creates nonsense(noise).... people on the market think and trade differently which create the market randomness... so yes the market is random... other wise it would respect e.g S/R levels to the pip all the time.

Sigh, I try to stay away from conversations like this anymore because I think it goes in circles, but ama chime in here. The issue with what you say is that you believe that everyone in market carry the same weight, and that is simply not true. Heck even a person with a hundred million has only a little say at certain times of the day, it is the aggregate, the pooling together of the biggest buyers and sellers that have the "say" in Forex exchange. S/R is a lagging indicator, and by design should be used to give bearing and nothing else, S/R in the truest sense is dynamic and always change at every level price moves. When price moved down and back up it was supported and when it move up and back down it was resisted, ama leave it at that I think you understand what I am saying.

But to some it up, to anyone who believes the market is random it simply is not, and learning how it works and why price moves the way it does is one of the most beneficial thing you can do for your trading, that's actually when trading becomes fun.
Being a trader is lonely, but being a great trader is lonelier still
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