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Is random really random?

  • #141
  • Jul 25, 2014 12:34pm Jul 25, 2014 12:34pm
The thread asks the question whether or not the market is truly random. When someone gives an example of non-random market behavior and then backs it up with proof, some of you moan and complain. It makes me wonder if you work for some of the retail brokers that wish to keep retail traders ignorant of how to truly be a successful trader.

Most successful traders I know, are designing their own systems, thinking outside standard convention and coming up with concepts on their own. They are not following the herd off the edge of a cliff and they are still in the markets YEARS later as proof of their success, watching all the Newbies come and go each year.

Learn from people who know what they are doing and what they are talking about. Not from people who won't be here unless they work for a Retail Broker or are getting paid by a Retail Broker in some way to keep you in the dark.
F-X-C-M | A Classic Retail Bucket Shop Scam Artist Who Manipulates Prices
  • #142
  • Jul 25, 2014 1:36pm Jul 25, 2014 1:36pm
I don't know if you guy notice but the thread owner does not even "want to put any comment" he already gave up after the 1st post.

This thread is about either the market is truly random. Anyone can say:

"Yup the market is not random. I win all the time so the result the market is NOT random. I am not going give away my system you will just have to believe my word"

The problem here is "no one like to input useless comment" even people people who call other idiots comment is useful in a way that the "victim" can not understand why....

So result people try to "prove why their comment is right" other wise their comment is a waste of their time.

Because of that people have to prove (provide info) to support their "claim". In this case iDoubleStoch provide his half secret system that no one understand because he doesn't want to give away his secret....

iDoubleStoch, you can NEVER prove the market is not the random. If you EVEN get 1 loss only 1... is all it take to DISCREDIT your "non-random claim"

I haven't seen you claim your self as the person with power to see the future... So if you can't see the market move from pip to pip EXACTLY every time. You lost the point. Obviously even if you get it right 5x in a row do you know how many "trial you have to prove? ... it's 5000 trades of EXACT precision"

I am sure you don't have time for that even if you can prove ...5000 exact win trade...

-----------
Is it really that hard to say " I am the best trader. The market is SO RANDOM that I can't see the future. But I am the best because I win even without seeing the future"

The quotation above is an acceptable answer to me and should be to everyone because it make perfect sense from beginning to the end. (Note: if you are the best you need to prove $$$$ other wise I wouldn't claim I am the best"......
  • #143
  • Jul 25, 2014 2:02pm Jul 25, 2014 2:02pm
Victor,

I'm over here now: http://www.forexfactory.com/showthread.php?t=496501 discussing the merits of B2i. I don't have time for hopeless people anymore. If you want to talk B2i and the non-random nature of the markets, then join in. Otherwise, we just go around in circles and nothing ever gets done.

B2i, is a singular indicator sitting inside rather robust technical trading system and mine is not to explore the system, but to show that randomness is not what most traders definite it to be. This will be my last post in this thread. I saw you lurking in the other thread, but then you came and posted here.
F-X-C-M | A Classic Retail Bucket Shop Scam Artist Who Manipulates Prices
  • #144
  • Jul 25, 2014 2:32pm Jul 25, 2014 2:32pm
Quoting 60minuteman
{quote} if the results are not the same everytime with exactly the same conditions then there is randomness.
the problem with this statement is, the conditions will never be exactly the same. Conditions are constantly changing, and therefore, so will results. We all know that a big part of trading is keeping up with events, and then changing your position/expectations based on your analysis of how these changes will impact price. Expecting the market to exactly repeat results, or to expect precision in repeating exactly to the pip some other aspect of market performance, will lead to frustration. This is not a result of randomness, but is a function of the big ugly complex equation that determines price. The more you understand what's going on in that equation, the less random things appear.
  • #145
  • Jul 25, 2014 2:49pm Jul 25, 2014 2:49pm
Quoting iDoubleStoch
The thread asks the question whether or not the market is truly random.Most successful traders I know, are designing their own systems, thinking outside standard convention and coming up with concepts on their own. They are not following the herd off the edge of a cliff and they are still in the markets YEARS later as proof of their success, watching all the Newbies come and go each year. Learn from people who know what they are doing and what they are talking about. Not from people who won't be here unless they work for a Retail Broker or are getting...
You have a good point. Obviously, even the systems of the past, Elliot, Wyckoff, Livermoore, Dow, never were exact. If these systems were we would all be drinking bubble up and eating rainbow stew. Why are there so many EA's and new ideas floating out there on how to trade the markets. It is science and behavior. It has all the ingredients of exploration, observation and research. But usually with a price tag. So if you can come up with your own method why not! But I often ask this question, if there system is so great why are they trying to sell it to me. Because it doesn't work, that's why!
  • #146
  • Jul 25, 2014 3:13pm Jul 25, 2014 3:13pm
Quoting GEfx
{quote} the problem with this statement is, the conditions will never be exactly the same. Conditions are constantly changing, and therefore, so will results. We all know that a big part of trading is keeping up with events, and then changing your position/expectations based on your analysis of how these changes will impact price. Expecting the market to exactly repeat results, or to expect precision in repeating exactly to the pip some other aspect of market performance, will lead to frustration. This is not a result of randomness, but is a function...
I DONT BELEVE YOU WILL EVER CONVEY THIS.

there is a level where understanding the sructure become s erelevent ,the information and the power dictate.but the over welming variables somtimes gives advantage to the bottom feeders,and we are the bottom feeders.as much as you try to convince the more you are deemed to exstinction.

although most are looking at the incorrect things and those with wisdom reconise this failing it serves no purpose.for each belief fails to seeeeeeee there are alternative perspective,some of the great minds of the maths here refuse to look further than ther peers.

i do not believe GEfx that the pre programmed mind can adjust to your thoughts or even question .

just because a candle stick pattern has no value stastically does not mean it has no value at all.

the value is in the the pattern of behavour of human programmed minds not the pattern left behind in the candle patterns.

the question of the fundementals are a cycle of human behavour that repeats in cycles again and again.
  • #147
  • Jul 25, 2014 3:31pm Jul 25, 2014 3:31pm
Quoting 60minuteman
{quote} if the results are not the same everytime with exactly the same conditions then there is randomness.
You must have missed a previous post of mine http://www.forexfactory.com/showthre...66#post7629666

Where I stated that from an Auction Market Theory perspective, Markets are self organizing and driven by feedback. The market adapts to information from trader feedback. Not Random.

AMVT is not a formula, leading to an "end result", but it distills much of the pattern recognition information into “useable numbers“ for a trader's strategy.

In a larger sense AMVT represents market concepts beginning as "ideas and qualitative evaluations", being transformed into more measurable, "quantitative" numbers. The move is from practical "observational" methodology developed to a more analytical "format".

AMVT is the quantification of profile and market "condition" variables (reference points), providing the "data" for finding value (condition). Reference points
are those quantitative pieces of information that describe the market. We are not quantifying results, we are quantifying & measuring the "Data used", not the Market itself.
AMVT is oriented to quantitative evaluation of reference points, NOT the quantitative evaluation the Market itself.

Maybe I should rephrase: From an Auction Market Theory perspective, the use of "Measured and quantified" data (quantitative pieces of information that describe the market) does not need to have identical results. The whole premise behind the Theory is that markets are not Random, and that they are self organizing and driven by feedback
Markets are not efficient, rather they are effective - Jones
  • #148
  • Jul 25, 2014 4:42pm Jul 25, 2014 4:42pm
Quoting GEfx
{quote} the problem with this statement is, the conditions will never be exactly the same. Conditions are constantly changing, and therefore, so will results. We all know that a big part of trading is keeping up with events, and then changing your position/expectations based on your analysis of how these changes will impact price. Expecting the market to exactly repeat results, or to expect precision in repeating exactly to the pip some other aspect of market performance, will lead to frustration. This is not a result of randomness, but is a function...
GE,

From what I've learned through my discussions with successful traders, you're exactly correct. It's human nature to write off as "random" any process where we are unable to see or understand its underlying design. In similar vein, we see many threads and statements on trading forums like "profitable trading is mere luck", "TA doesn't work", "entries give no better edge than a coin toss" etc. Not only are such statements unprovable, but they reflect more about the extent of the writer's knowledge and experience, than they do about absolute truth. To state the obvious, none of us has infinite knowledge.

David
  • #149
  • Jul 25, 2014 4:58pm Jul 25, 2014 4:58pm
Quoting PipMeUp
{quote} This is exactly this. .........
Pip,

Thanks again for your reply.

I think my misunderstanding you before comes down to terminology. When somebody talks about a "completely random walk" I assume that they mean "coin flip random", but of course that's not necessarily true.

Quoting PipMeUp
Say you flip the coin and you get a lot more of heads than tails. You'll need a lot of tails now to balance back to 50%. During this 2nd period you'll get again some head keeping the score above 50%, just by random chance. Since we look at the price returns (head=up, tail=down), the price itself is the integration of the result. As long as the result contains more heads you integrate a positive value and the curve increases. You get a trend just by random chance!
As we both know, it's impossible to gain an edge in a coin flip type game. Flipping a coin repeatedly will result in 'trends' of heads and tails, but the outcome of the next flip is always 50/50, and anybody who believes that betting either with or against such trends provides an edge, is being fooled by gambler's fallacy. Hence if profitable trading is not merely fortuitous, then markets must behave in a qualitatively different manner than a coin flip. Which I believe is in fact the case.

David
  • #150
  • Jul 25, 2014 6:09pm Jul 25, 2014 6:09pm
Quoting mzvega
{quote} You must have missed a previous post of mine http://www.forexfactory.com/showthre...66#post7629666 Where I stated that from an Auction Market Theory perspective, Markets are self organizing and driven by feedback. The market adapts to information from trader feedback. Not Random. AMVT is not a formula, leading to an "end result", but it distills much of the pattern recognition information into “useable numbers“ for a trader's strategy. In a larger sense AMVT represents market concepts beginning as "ideas and qualitative...
I didn't miss anything, I have looked at these concepts and it is subject to the same limitations any other way of predicting what will happen next is. I can see the appeal, it plays precisely on the traders psyche and desire to remove uncertainty. Like any approach it will be possible to make profit using it but equally every approach will have its own flavour of pain also.
tradewith60
  • #151
  • Jul 25, 2014 7:25pm Jul 25, 2014 7:25pm
Quoting 60minuteman
{quote} I didn't miss anything, I have looked at these concepts and it is subject to the same limitations any other way of predicting what will happen next is. I can see the appeal, it plays precisely on the traders psyche and desire to remove uncertainty. Like any approach it will be possible to make profit using it but equally every approach will have its own flavour of pain also.
A Practice is a proposed analysis method. If permitted by market theory, it is an approved or permitted practice, and may safely be used in market analysis and trading. A non-permitted practice is outside the bounds of theory and is not recommended for use in market analysis.
Prediction from feedback is not a permitted practice in AMVT

AMT (theory) develops the principles governing short timeframe market phenomena. Often, prediction of future events qualifies a theory. Financial markets are replete with market predictors and market predictions.

It is an axiom of Auction Market Theory that future prices are not predictable. Current market condition is found from AMT principles. Market condition is the state of the market, e.g. local equilibrium or balance, local trend or transitions between the two.

AMT analysis shows that changes to the current condition can be the basis for market decisions. A strategy developed subject to the event of change from one market condition to another is non-predictive (normative). While predictions of future price are not made, logical conclusions from market behavior are.

AMVT Practice 7: Predicted Prices (are not an allowed practice)
Predicting the future behavior of a market is most attractive to a trader. Such services are regularly advertised in market related publications. A prediction of the coming market track in a complex market suggests that market information in the feedback supports, is the base of, the prediction.

However, the feedback cannot generally provide predictive information since the feedback depends on trader behavior. Trader behavior at a future time is not known in the current timeframe. That is, all traders see a market change at the same time. The trader response to that change and subsequent changes is conditioned on the path of each change in sequence. Since the later changes can only be effected on the basis of the next earlier change, the market behavior is uncertain from feedback to feedback. Prediction from feedback is not a permitted practice.

How can AMVT “be subject to the same limitations any other way of predicting what will happen next is” when the practice of “prediction” is not a permitted practice?
Markets are not efficient, rather they are effective - Jones
  • #152
  • Jul 25, 2014 7:37pm Jul 25, 2014 7:37pm
I see why these threads go around in cirlces. I think what needs to be done is to give a definition of the word first then you can have a thread on it. As I Reread the thread it's clear that what is being argued about, is more the meaning of the word random, than random itself. I have seen instances where people are arguing the same point in different ways and from different angles. There has to be some definition of the word "random" or else we'll go around in circles. I notice that some people consider something that is not 100 percent accurate as being random, whereas my definition of not random is not as strict but something closer to 70 percent. But since this is the market, that would be 65-70 percent with a RR of at least 1:1 to be useful. But threads like this are always welcome on a friday that's for sure.
Being a trader is lonely, but being a great trader is lonelier still
  • #153
  • Jul 25, 2014 7:44pm Jul 25, 2014 7:44pm
Quoting iDoubleStoch
Quoting Proximus
{quote} {quote} Dude you are contradicting yourself../quote] You need to learn to read in context and stop splicing the words of another to prove a point that does not exist. Second, you need to simply take what you have seen here at face value and stop pretending that you did not see it happen with your own eyes. None of the Boxes that I drew for you yesterday or today showed failures in their B2i structures. ALL of them moved to their respective Fall Lines once the dust settled and it is up to you to figure out why - I
...
Very well then, if you find a technical model which works and you can make consistent money with small risk, then its good.However i would not show that around forums, cos once the big guys see your method it might become obsolete, if everyone will trade that.

I`m still hybrid, like 60% fundamental ,20% technical and 20% other tools, but if you are 100% technical then its good for you.
"There's a sucker born every minute" - P.T. Barnum
  • #154
  • Jul 25, 2014 8:46pm Jul 25, 2014 8:46pm
Random, luck and such a things doesn't exist. That the variables of a determined system can't be processed and/or understood, doesn't mean it's all "Random"... It's just complex. Remember: "There's no impossible things, only incapable mens". Keep up the effort.
Trade, don't bet.
  • #155
  • Edited 2:28am Jul 26, 2014 2:16am | Edited 2:28am
Quoting Proximus
Very well then, if you find a technical model which works and you can make consistent money with small risk, then its good.However i would not show that around forums, cos once the big guys see your method it might become obsolete, if everyone will trade that. I`m still hybrid, like 60% fundamental ,20% technical and 20% other tools, but if you are 100% technical then its good for you.
Proximus,

The more you go into fundamental analysis, the more you are starting to lose your lust.

Here is something that I might be able to teach you still:

100% technical is the ONLY way to trade. I can prove why, I just don't feel like it right now... (not to mention, there is no way I am going to give up my biggest secrets... on a public forum... with all noobs)
Please check out my blog at https://from-zero-to-hero . net
  • #156
  • Jul 26, 2014 3:11am Jul 26, 2014 3:11am
Hi smash no one gives his biggest secrets but we all learn from each others and the more market is fair the more we all have a chance to win i have many systems here but i use some only including technical and all for sure can not revealed all have a nice day
focus while relaxed to see better
  • #157
  • Jul 26, 2014 3:33am Jul 26, 2014 3:33am
Quoting saneblane
I see why these threads go around in cirlces. I think what needs to be done is to give a definition of the word first then you can have a thread on it. As I Reread the thread it's clear that what is being argued about, is more the meaning of the word random, than random itself. I have seen instances where people are arguing the same point in different ways and from different angles. There has to be some definition of the word "random" or else we'll go around in circles. I notice that some people consider something that is not 100 percent...

100% true. It's all about how you define random. I'm a professional poker player… and while the game is definitely a math game…. the card distribution is purely random.

Trading is a bit different. Price action is clearly random in the sense that it can do whatever it wants at any time. Anyone arguing against that should have 100% winning trades over his life time, which is never going to happen.

​Lower time frames/intraday trading is even more random than the long term/swing trading. Long term investing is less random in the sense that you can use fundamentals or an established trend to foresee what will happen.
  • #158
  • Jul 26, 2014 3:37am Jul 26, 2014 3:37am
Quoting smash1820
{quote} Proximus, The more you go into fundamental analysis, the more you are starting to lose your lust. Here is something that I might be able to teach you still: 100% technical is the ONLY way to trade. I can prove why, I just don't feel like it right now... (not to mention, there is no way I am going to give up my biggest secrets... on a public forum... with all noobs)

For intraday trading and short term, fundamentals are basically irrelevant. But long term investing (which of course isn't trading) they're all you need. Don't even need to be able to look at a chart and you will make fortunes with the right fundamentals.
  • #159
  • Jul 26, 2014 4:59am Jul 26, 2014 4:59am
Quoting Ck87
100% true. It's all about how you define random. I'm a professional poker player… and while the game is definitely a math game…. the card distribution is purely random. Trading is a bit different. Price action is clearly random in the sense that it can do whatever it wants at any time. Anyone arguing against that should have 100% winning trades over his life time, which is never going to happen. ​Lower time frames/intraday trading is even more random than the long term/swing trading. Long term investing is less random in the sense that you...
Hi Ck!

Haven't heard from you in a long time, how are ya buddy? I am responding to your post because I 100% agree with everything you said.

Also, you know that I am a big poker player too (not professional yet, but wannabe) and I just love it so much. I guess I am a pure gambler at heart. But perhaps it is getting too late for me now... I just made one of the dumbest poker decisions of my life and had an amazing comeback at a cash table, from 4 BB to 290 BB... only to go to... you guessed it... 0 BB. I guess one of my nicknames should also be 'The Comeback King' because I seem to do it time and time again, but I was f*ing stuipd tonight and lost it all... just couldn't hold on to it... much like trading lol... and I needed the money badly. I guess 'The Comeback Loser' would also work as well.
Please check out my blog at https://from-zero-to-hero . net
  • #160
  • Jul 26, 2014 7:47am Jul 26, 2014 7:47am
Quoting smash1820
{quote} Hi Ck! Haven't heard from you in a long time, how are ya buddy? I am responding to your post because I 100% agree with everything you said. Also, you know that I am a big poker player too (not professional yet, but wannabe) and I just love it so much. I guess I am a pure gambler at heart. But perhaps it is getting too late for me now... I just made one of the dumbest poker decisions of my life and had an amazing comeback at a cash table, from 4 BB to 290 BB... only to go to... you guessed it... 0 BB. I guess one of my nicknames...

Hey man! Been doing okay…. still doing really well in poker, but losing profits in trading because I still want to go for a big run (and then settle down) but that mentality just doesn't work and it's causing me massive stress.

Trying to trade smaller and take things slower because I know I should be a profitable trader but I turn my edge into a massive loser with over leveraging. It's simply not going to work.

I know you have the same problem… We need to change.
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