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Attachments: Forex Dream Chasers - The 90% rule of randomness
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Forex Dream Chasers - The 90% rule of randomness

Price is a function of orders nothing more nothing less....................

atheer1
atheer1
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"...
Just a point of view,which could exist.
Have no intention to argue about details,but absolutely agree with the poster that 90 % 80% (I like Pareto's 20/80 principle idea,so let say it is 80%) of moves are random and one's logical view says that they are should be like this,otherwise it would be the easiest job for everyone to beat the market....
After all remains 20% of prediclable ,analizable,understandable and tradeble situations. And any trader's first job is to find them on the chart and work with them.

Wish u all great trading week!!

Rgs.,
Success is nothing more than a few simple disciplines, practiced every day.
Quoting Mingary
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 ...
Of course that's random. It's called confirmation bias. You're looking at hundreds of charts and only picking the ones that fit your ideas and avoiding the one's that don't. Go ahead and trade based off of that. I can guarantee you that you'll fail over the long run.
Quoting atheer1
Price is a function of orders nothing more nothing less.................... atheer1
and I am sure you will agree at times lack of orders
Quoting replaced
{quote} You're looking at hundreds of charts and only picking the ones that fit your ideas and avoiding the one's that don't.
So, should i ignore rate hike or any game changer policy as well ??
I see it all in between ...
  • Post #86
  • Quote
  • Edited 5:12am Jun 15, 2015 4:43am | Edited 5:12am
Quoting replaced
{quote} Of course that's random. It's called confirmation bias. You're looking at hundreds of charts and only picking the ones that fit your ideas and avoiding the one's that don't. Go ahead and trade based off of that. I can guarantee you that you'll fail over the long run.

Good point. Indeed it is another 100 % confirmation bias.
The whole subject is like watching patterns in the clouds, it's pretty but rather useless (:
Do you see 90% randomness in these charts?

I dont
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Enter Signature
I appreciate the OP shared some of his personal experience as a bank trader.

no offence, but I think random/predictable has been debated many times. and 90% random or 20% random doesn't make much difference because it still means, market is sometimes random. whenever there is a % tag in front, it means not guaranteed and it's a probability. everything in trading is probability, so why bother with the 90% or any %?

discussing this topic has no real benefit in my own opinion. as the OP said, all the bank is trying to do is to fill the order as near as possible to the proposed price, better price means bonus, so does that mean bank has an interest to push the price to the preferred direction? and OP did mention if price moved too far (in the unfavoured direction), they have to chase the price. so the bank OP worked for is unable to single-handed the market which is totally within expectation and understanding so far.

I think the OP has not finished his story, based on my current understanding from the few posts here. however, even if the bank (OP has been working for) has no intention to make the market, it doesn't mean other banks do not. I totally agree that at any given point of time, the buy/sell participations are totally random and unpredictable as no one can predict the behaviour of the rest of the world. however, the imbalance of buying and selling power can be seen on the chart as an indication of price changing, regardless what exactly is driving that. market is just the sum psychological outcome of combined buyers and sellers. so you can say it's mostly random, but that doesn't help much in one's trading by knowing this.

is the OP suggesting one thing: don't try to predict the market? or anything else? i guess a lot of profitable traders don't try to predict the market at all, however they do have a bias on the buy/sell. that's all?
Quoting Gobigfx
{quote} Institutional Traders get paid by staying within the volume weighted average price do you understand what that means ? I dont think you do so let me explain it to you. When we are given a forward order from Mercedes Benz it basically states that over the course of a time period typically one or two days we will fill your order with no guarantee other then our best efforts. We do however get paid bonuses for doing our best efforts. Those best efforts are anything better then the average price during the time of the order and size of the order....
nice illustration
Paul Tudor Jones:
http://www.outsider-trading.com/paul...entary-trader/

If I flip a coin ten times, I will win. Why? By using a system of psychology to predict your choice, and then by guiding you falsely through your own decision making process.

If you flip the coin, it's a very different game.
I don't understand how anyone can seriously claim that price movement is random except when some new "information" comes into the market - which sounds like the old "efficient markets" hypothesis, and that has been pretty well debunked.


Here's a little exercise - get a bunch of historical data and try being long of the currencies that were going up the most over last several weeks / months against the ones that were going down the most. Keep it simple: use time/based exits.

You'll get a profitable result. There has been lots of research on how momentum exists, and can be used profitably, even in the relatively choppy Forex market.

If anyone can explain to me what new information entering the market causes this exploitable momentum effect, I'm all ears.
Quoting thomasK
Do you see 90% randomness in these charts? I dont {image} {image} {image}
The left side of the chart is always a perfect 20 / 20 vision (:
OP: In case you don't know you can kick the fart-knockers out of the thread simply by placing them on your general ignore list. Go to their profile and it's an icon up the top near their avatar. They can't post here after that, and they can go back to jerking themselves silly elsewhere.
Congratulations ScalaFX for coming out of the closet!
Quoting qp2
{quote} and I am sure you will agree at times lack of orders
right
atheer1
This thread is getting far too much attention, people are free to believe what they want. It's whether you're able to take money out of the market on a consistent basis which is important.

I have no idea if it's random and I don't particularly care. All I care about is whether there's a possibility for me to make money in the long run if I continue to trade my edge.

If it is random though, why does price bounce off my trendlines sometimes to the pip? I'm genuinely interested in this by the way, this isn't me being sarcastic?

The USDCAD example shows I had a good idea of where to not only get short, but to exit, and then also get long again, how is this possible if it is random?
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Quoting Gobigfx
The biggest lie that you have been told is that "Price movement is predictable"
I totally agree, however, the biggest issue with this statement is what by implication it suggests - that in order to be a successful retail trader one must be able to "predict" price movement. In my view this couldn't be further from the truth.

The biggest difference between retail and (let's call them) "commercial" traders is that the big guys have the funds to move the market. Retail don't, and in that respect, our job is to keep an eye out for the kind of price action that tells us the big boys are moving the market and then and only then try our best to trade in harmony with them. Retail is a completely different mindset from "commercial" and perhaps part of the reason why you lost a lot of money on your first foray into trading your own account?
Quoting Gareth22
This thread is getting far too much attention, people are free to believe what they want. It's whether you're able to take money out of the market on a consistent basis which is important. I have no idea if it's random and I don't particularly care. All I care about is whether there's a possibility for me to make money in the long run if I continue to trade my edge. If it is random though, why does price bounce off my trendlines sometimes to the pip? I'm genuinely interested in this by the way, this isn't me being sarcastic? The USDCAD example shows...

Draw some horizontal lines wherever you want, then wait for the chart conform to your gibberish future predictions of support and resistance that you literally pulled out of nowhere. Drop some fib lines, gann wheels, einstein toilets, and whatever else you want. You'll see it conform if you allow it time to do so. No need to do the same with angled trend-lines... you are already doing it.

This is precisely the same thing you can do to prove to yourself that your broker gives exactly zero fucks about any orders you place. Drop a line, or write the number down, and then watch how your broker still "stop hunts you" even though you don't even have an actual order in the system for them to know about.

You see what you want to see. Not what's necessarily there.
Congratulations ScalaFX for coming out of the closet!
Quoting nubcake
{quote} Draw some horizontal lines wherever you want, then wait for the chart conform to your gibberish future predictions. Drop some fib lines, gann wheels, einstein toilets, and whatever else you want. You'll see it conform if you allow it time to do so. No need to do the same with angled trend-lines... you are already doing it. This is precisely the same thing you can do to prove to yourself that your broker gives exactly zero fucks about any orders you place. Drop a line, or write the number down, and then watch how your broker still "stop hunts...
I'm not drawing lines and showing them match up in the past. I drew them up when the right hand side of my chart was empty then traded off them accordingly and both trades made 3rr?

How have I drawn those lines to fit my argument?

I wasn't stop hunted, the trades won?

Your paragraph made no sense?
Quoting nubcake
{quote} This is precisely the same thing you can do to prove to yourself that your broker gives exactly zero fucks about any orders you place. Drop a line, or write the number down, and then watch how your broker still "stop hunts you" even though you don't even have an actual order in the system for them to know about.
Your stop placement strategy does not differ from when you place the trade. We hunt strategies, not traders.
Quoting Tavurth
{quote} Your stop placement strategy does not differ from when you place the trade. We hunt strategies, not traders.
I was clearly addressing the special snowflakes whose orders are always "hunted by brokers" and construct fantasies in their mind. No, sorry, the correct terminology amongst this bunch is "br0kers" (because spelling it properly is apparently the same as summoning Beetlejuice). You were probably not my target audience.
Congratulations ScalaFX for coming out of the closet!
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