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Forex Dream Chasers - The 90% rule of randomness

  • #61
  • Jun 14, 2015 8:06pm Jun 14, 2015 8:06pm
Gobigfx, I think you are one of the guys here who are experienced enough to understand the market.

Many traders failed to notice or understand that the market is mostly random by nature. I am not sure how many percentage of randomness the market is,
but very likely to be around 90% or so.

Of course there are some directional biases mainly due to speculations, however, in overall, the market is random.

If you flip a coin a thousand times, plot a graph, you will notice that it represents the financial markets chart.

Then what about trends?
In randomness patterns, there are trends, Google for a coin flip chart, or create a chart using an excel sheet. You will see trends.

Why are there trends?
Assuming upward movement is 1 and downward movement is 0. 101010111100111000011001100111100010
Theoretically, the zeros and ones have a 50-50 chance of occurring. Then after a few cycles of 1 and 0 alternatively, there will be a consecutive 1s or 0s.
This makes a trend.

Have a look at this example:
1010 - 1st sequence
1110 - 2nd sequence - trend started to build
1010 - 3rd sequence - trend continues - because the probability of 000 occurrence is low
0011 - 4th
1001 - 5th
0001 - 6th - back to the starting point - it takes time to revert back to the original point due to randomness and probability.

Beating the market is not easy. You have to find the edge. There are many ways to do it, but certainly not easy. An MA crossover is one of the methods that I found to be profitable.
  • #62
  • Jun 14, 2015 8:11pm Jun 14, 2015 8:11pm
Quoting Rtm
{quote} yeah sorry man, this account is doomed, can alreadytell you using some kind of grid/martingale because you are DOWN pips overall. no way unless you average in bigger than initial entry price.
i add deposit for my account and it can make more profit than before
"Trap The RED News"
  • #63
  • Jun 14, 2015 8:15pm Jun 14, 2015 8:15pm
Quoting superblack
Gobigfx, I think you are one of the guys here who are experienced enough to understand the market. Many traders failed to notice or understand that the market is mostly random by nature. I am not sure how many percentage of randomness the market is, but very likely to be around 90% or so. Of course there are some directional biases mainly due to speculations, however, in overall, the market is random. If you flip a coin a thousand times, plot a graph, you will notice that it represents the financial markets chart. Then what about trends? In randomness...
forex not talk about coin....it about what happen in this world its more complex
japan tsunami = usdjpy falling because investor scare their money will gone...so trend is sell, about employee or rate make the trend official release
its not a random but have a reason..dont think like a gambler
"Trap The RED News"
  • #64
  • Jun 14, 2015 8:22pm Jun 14, 2015 8:22pm
Quoting srt
If price movement is 90% random, flip a coin 10,000 times(heads=buy, tails=sell) with a computer generator & plot the results on a chart. Will it look anything like the one below? {image}
Bit off topic but could I grab your chart's background colour mate? Looks good :nerd:
  • #65
  • Jun 14, 2015 8:45pm Jun 14, 2015 8:45pm
Why is the market random?

1. A long-term position trader is buying EURUSD, and a short-only hedge fund is shorting EURUSD.
2. Soros is predicting that EURUSD will appreciate, then he buys a few yards. Buffets feels that EURUSD will depreciate, he then shorts.
3. Mercedes Benz hedge a long position while Cheverolet hedge the opposite direction.
4. A HFT is buying on EURUSD while a high net-worth scalper is shorting a significant amount of contracts on the same pair.
5. A retail trader is buying EURUSD and selling GBPUSD at the same time.

These happen at different times with different volumes. Hence, making the market random.

There are certain exceptions like disasters, etc. Where majority of the speculators will trade in the same direction.
  • #66
  • Jun 14, 2015 8:46pm Jun 14, 2015 8:46pm
its a pattern not a random you just dont see it make a trap in low volumes high low...and kaboom in high volume make a profit
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot_34.png Size: 33 KB
"Trap The RED News"
  • #67
  • Jun 14, 2015 9:02pm Jun 14, 2015 9:02pm
Quoting reizamv
its a pattern not a random you just dont see it make a trap in low volumes high low...and kaboom in high volume make a profit {image}
This is mainly because of the trading sessions. More traders are participating relative to the low volume part. Try looking at the Daily charts, you will not see this pattern. And volume does not necessarily tell you the direction of the price.
  • #68
  • Jun 14, 2015 9:05pm Jun 14, 2015 9:05pm
Quoting superblack
{quote} This is mainly because of the trading sessions. More traders are participating relative to the low volume part. Try looking at the Daily charts, you will not see this pattern. And volume does not necessarily tell you the direction of the price.
yes follow the pattern that always same and continue...and make profit from them with break high low in low volume
..and it break the theory of randomness
"Trap The RED News"
  • #69
  • Jun 14, 2015 9:34pm Jun 14, 2015 9:34pm
Quoting Dimi.A
{quote} Bit off topic but could I grab your chart's background colour mate? Looks good :nerd:
Custom: 95,80,65
  • #70
  • Jun 14, 2015 9:51pm Jun 14, 2015 9:51pm
some point market is random some point market is predictable, change the way you look the chart, stop finding perfect indicator there no such thing
Closer To Dream
  • #71
  • Jun 14, 2015 9:55pm Jun 14, 2015 9:55pm
Quoting reizamv
this profit not a random...its continue with trend...iam not a gambler but a trader...random just for gambler {image}
Man, I love your optimism, you've been in slow decline to -20% after over 3000 executed trades, then came a ray of light (read luck) and in just 2-3 trades your balance skyrocketed to 80% gain.
  • #72
  • Jun 14, 2015 10:16pm Jun 14, 2015 10:16pm
Quoting Gobigfx
The biggest lie that you have been told is that "Price movement is predictable" and simple to understand and that some indicator or chart reading method will somehow turn you into a professional trader.
Price movement definitely isn't 100% predictable. However, we can predict with a certain probability to where the price is going to go next.
Example: A double bottom where the 2nd bottom is at a strong point of support. There is > 50% probability that if price comes within this range that price will bounce off this range.

Quoting Gobigfx
As a professional institutional trader we got salaries and bonus's (if we preformed well) but we didn't make income from trading profits. We made income from working on trades the firm gave us to manage.
A majority of a banks trading is not speculative trading. A majority of FF traders are speculative.
AND speculative trading makes up a big proportion in the forex market. Yes, big corporations like Apple and Toyota will come into the market to hedge themselves but corporations don't make up 90% of the forex market not even 50%.

Quoting Gobigfx
If you think that price movement is predictable then you are a fool because you just don't understand the randomness of orders hitting the market from all directions "most" of the time.
I agree that price movement isn't predictable. The way we traders make money is by predicting price movement with a certain % of success and taking a trade where the risk:reward ratio is in our favor.
Predicting price movement is only 50% of what we do. Money management and calculating if this trade is worth the risk is the other 50%.
We don't blindly take a trade because it has a 50% probability of working out.
  • #73
  • Jun 14, 2015 10:48pm Jun 14, 2015 10:48pm
randomness is like chaos. it is not because there is no reason underlying the movement but because there are too many parameters that is beyond our ability to calculate.
and most of the parameters are called humans.

what we see as trend is a kind of crowd control.
and in simple ways, what can be predicted are called common sense.

eg: people buy when the price is cheap.
  • #74
  • Jun 14, 2015 11:13pm Jun 14, 2015 11:13pm
Attached Image
Quoting Gobigfx
{quote} So why are you here ? Why are you spending your time in a trading forum if your such a success and you can see this so called un random behavior so well ? I've been a member of this forum for 3 years and have come in maybe 5 times in the last 3 years because I have been busy making $$$ why would I come in here ? Open your mind because if you do this thread will be the best one you've ever read.
  • #75
  • Jun 14, 2015 11:46pm Jun 14, 2015 11:46pm
Quoting Gobigfx
So I've been wanting to write this post for a few years but I knew it would meet with a lot of anger and objection but here goes anyways. You all are living an imaginary dream. A career as a retail trader long term (7 plus years) is almost impossible, the ratio is not 5% its more like 1%. I have been trading for a very long time and the only reason that I have survived multiple market conditions is because I was mentored for 1 year as a floor trader and then for another few years as a desk trader for a few institutions. After I left the "professional"...
Well I came here after a few of my buddies put you on ignore. I had to see the latest troll on FF. However, I do not think you are troll. I think you actually believe what you type. The market is indeed random for the most part.



In the short term.


In the longer term, especially in currencies, fundamentals drive currency strength. If you have lost money, it is because you do not know what to do when you see a price change over a given period of time or ticks.

Starting threads like this one will not teach you this, no one is going to just tell you. If someone just told you, then you will tell others, and they will tell others, and eventually it will have an impact on the government of your country, and they will make what you are doing illegal.

So, no one is going to tell you what you are looking for. But, if you do study, vigorously FF, every answer you seek is here.

Good luck.
If you are good at something, never do it for free--Joker
  • #76
  • Jun 15, 2015 12:06am Jun 15, 2015 12:06am
Why don't you all just let the guy post his evidence as he claims he will in his own due course instead of all typing as if you guys are some sort of gurus and trying to give him advice about his supposed short comings. Even "senior traders" (gamblers) are posting advice - is there no end to the circus here at FF.... There is infinite 'truth' in the markets, keep an open mind and you might learn something - close your mind it is assured you will learn nothing.

With kind regards,
MK
  • #77
  • Jun 15, 2015 12:09am Jun 15, 2015 12:09am
The OP is absolutely correct. Forex is very random, especially in any timespan over the course of 30 minutes. When you get into bigger timespans such as weeks and months, it gets much less random and more based off fundamentals. The reason why so many traders fail is because they are trading high leverage on small timescales which is about 99.9% random. I've written a lot about this before but was ignored. As of today, I've made over $9,000 in stocks this year. Meanwhile I shake my head when I see people betting 50 bucks on Forex hoping to turn it into a million. Really? Is that what you think is going to happen?

Leverage amplifies losses, decreases ROI, and increases commission cost. If you actually want to make money in Forex, you'll have to learn that it's not a get rich quick scheme.
  • #78
  • Jun 15, 2015 12:28am Jun 15, 2015 12:28am
Quoting MidKnight
Why don't you all just let the guy post his evidence as he claims he will in his own due course instead of all typing as if you guys are some sort of gurus and trying to give him advice about his supposed short comings. Even "senior traders" (gamblers) are posting advice - is there no end to the circus here at FF.... There is infinite 'truth' in the markets, keep an open mind and you might learn something - close your mind it is assured you will learn nothing. With kind regards, MK
The reason he was jumped on my so many is that these types appear almost all the time. He is no going to post any kind of trading log that you can duplicate. I would not either if I had found an edge.

The OP is not looking to impress with his trading, he is hoping for someone to debunk his theory. But to do that you have give too many details to whatever system you have developed.

Since I doubt that anyone is going to give him a system complete with money management, I guess he will never be dis proven.
If you are good at something, never do it for free--Joker
  • #79
  • Jun 15, 2015 12:48am Jun 15, 2015 12:48am
GobigFX,

You were an intuitional trader? and you don't believe Market Price movement is predictable? you are wrong. It's very predictable if you study any price chart hard enough. You will see where price will go. I will give you a hint "Supply and Demand" google it.

I trade with nothing but bare naked price charts and lines, and make a living with Retail FX.

P.S. No, don't ask me for screen shots of my bank statements.
  • #80
  • Jun 15, 2015 1:57am Jun 15, 2015 1:57am
The price action is random --- until it's not.
Most of the time there is a random "drift" component
and sometime there is a reaction component.

for example gold
June 15, 2015 07:40 GMT 1 minute chart

Why did the price turn at around 1181.45 ?
Not random.
Buy orders coming in ...

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