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Forex Dream Chasers - The 90% rule of randomness

  • #321
  • Jun 26, 2015 4:57am Jun 26, 2015 4:57am
Quoting ephisi
{quote} LONG USDJPY 123.27
Out of uj long for plus pips. Will get better entry. Not liking price action. Guys market is not 100percent random. Nice chillin in here byeeeeee
  • #322
  • Jun 26, 2015 5:20am Jun 26, 2015 5:20am
Quoting Hurst
{quote} Hello Mingary, there are documented examples of people calling the market tops and bottoms on a regular basis, Gann's wheat trade was one such example. No one knows Gann's methods however they were rediscovered by a chap called DR. Jerome Baumring his work was later also simplified by Cowan who made some really precise stock market calls picking the low of the 2009 reversal to the day. So clearly there is some sort of motive force that drive markets that can be predicted in advance, otherwise it would not have been possible for the people...

I think randomness is all about your persepctive.

For instance, someone looking at a 1m, will see things differently to a 5 min trader, likewise, they are worlds away from a daily or weekly or dare i say it, a monthly trader!

the 1m trader could take hundreds of sell trades in the period that the weekly trader takes 1 buy sell... and they can both be profitable.

The market is random, but it is random in a largely predicatable way. The same is true about bees, and actually insects in the animal kingdom. Movements on a small scale are 'random' with no sense, unles syou look at the overall picture, and you can see the swarm moving in a particular direction. Again look at a flock of birds (swallows is a good example) Each bird is moving in their own irregular pattern, however, they are all moving in the same direction once you zoom out a little bit. For every 1m move, it feeds into a 5m move, that feeds into a 15m move that..... etc etc.

Lets not forget that at the bottom of all this is orders being filled. Regardless of the value of the trades being executed (to the large part) their is an acceptance and an offer. Both parties have a vested interest to get a sale.

The 100 million Merc deal is point in question, they will still be watching where the market moves and will scale into the position stacking to get an average price. Anyone who just chucks the 100 million on the table is NOT going to get the best deal, it is a simple point of supply and demand.

Likewise, because it is humans working the deals the animal instinct still plays a part (the oft used psychology aspect). This still means that the market makers can manipulate the market, big deals in one transaction can still be taken, which will move the market, but also a bit like swallows in a big group faced with flying into a building, they go round it, the same as we respond to avoiding the news events (or use them to our advantage...)

Out of chaos there is order.

Simple test. walk right up to a Monet painting. Like really really close. All you will see is random colours, i hesitate to even say brush strokes.... pull away a bit, and it will still seem random... it is only when you get far enough to see the overall picture that it will still make sense.

There is still order though to those brushstrokes... direction, colour composition... THAT is what we are looking for, and these variables will be what we profit from... recognise one up close, you can see it is part of the waterlillies, when you next see a bunch of brushstrokes with a similar colour composition, you think... AHA waterlillies....

Bit of a tangent, but i think it works! haha
  • #323
  • Jun 26, 2015 6:51am Jun 26, 2015 6:51am
Quoting rolandW
{quote} I think randomness is all about your persepctive.. Bit of a tangent, but i think it works! haha
Good post Roland. People also lose their perspective when they try to prise too much out of this business. Luck can be a cruel mistress and so patience and emotional maturity are important.
Gone to a better place
  • #324
  • Jun 26, 2015 7:09am Jun 26, 2015 7:09am
Quoting ephisi
{quote} What would you call it my dear experienced nfp?
market is not efficient
  • #325
  • Jun 26, 2015 7:40am Jun 26, 2015 7:40am
Quoting Nfp
{quote} market is not efficient
Youre right
  • #326
  • Jun 26, 2015 8:17am Jun 26, 2015 8:17am
If you are experienced as a private trader and/or one with a firm or institution you know there's truth to both sides of the comments - the intelligent ones. In the professional realm it's easy to not see beyond the what the scope of said persons' duties present. To place a finger on the behavior of the markets is just as vicarious as professing that they are completely random. That's the beauty of the markets that one should respect.
  • #327
  • Jun 26, 2015 8:19am Jun 26, 2015 8:19am
Quoting ephisi
{quote} Youre right brother. Very right. you got the right attitude. I want to make a bold call to prove the part non randomness of the market. USDJPY IS CURRENTLY DISCOUNTED. ITS TRUE VALUE IS BETWEEN 124 AND 125. SO EXPECT TO GET BACK ABOVE 124. IF YALL NEED MORE PROOF THAT MARKET IS NON ALWAYS RANDOM BUT SOMETIMES NONRANDOM LET ME KNOW
For the doubters, hope youre gradually changing your minds about this market. The question shouldnt be is the market random? The question should be how do i profit from the littile nonrandom window of opportunity which lasts a few hours per pair
  • #328
  • Jun 26, 2015 8:22am Jun 26, 2015 8:22am
Quoting ephisi
{quote} For the doubters, hope youre gradually changing your minds about this market. The question shouldnt be is the market random? The question should be how do i profit from the littile nonrandom window of opportunity which lasts a few hours per pair
In the words of nfp, market is not efficient. It has loop holes
  • #329
  • Edited 10:13am Jun 26, 2015 8:25am | Edited 10:13am
VWMA Indicator for MT4, as I understand it, Gobigfx trades from the extremes & from the VWMA (centre line).

Similar to Bollinger Bands/ Keltner Bands slightly different formula using volume.

No endorsement or advice is given here. Test with due diligence.

Attached File(s)
File Type: mq4 Market_Statistics_v7_0.mq4   8 KB | 463 downloads


Attached Image (click to enlarge)
Click to Enlarge Name: ScreenHunter_01 Jun. 26 14.25.jpg Size: 340 KB


With or without Volume Histogram option

Attached File(s)
File Type: mq4 Market_Statistics_v4_1(1).mq4   10 KB | 400 downloads


Attached Image (click to enlarge)
Click to Enlarge Name: ScreenHunter_03 Jun. 26 16.09.jpg Size: 181 KB
It never gets easier, you just get better
  • #330
  • Edited 10:33am Jun 26, 2015 9:33am | Edited 10:33am
Quoting Hurst
The market is not random, the people here that say it is do not understand or have the correct analysis tools to make this comment. The market is pure supply and demand, what you can see every day is the market going to these areas of supply or demand to get the orders. To say that the people chasing these orders are just randomly entering the market on a whim is just foolish. You may not be able to say exactly where a market is going by when but clearly that does not mean its random, it means that you lack the tools to uncover its driving force....
Quoting FXMori
I am not a professional trader, but i am a professional physics professor. I want to share with you my ideas about randomness. Randomness does not exists. It may exist at the quantum level (i think it doesn't, but someone would disagree with me) but surely not in the classical(i.e. every day life) level. What i mean is that price is random as much as a coin flip. While you can't possibily know the outcome, it s actually not random: it's a simple question of mechanics. So, price is random in the sense that you can't know where is going, but surely...




The few posts worthy of reading a few times. The institutional trader is a part of the machine, a worker bee, the professional retail trader is a master of self control and pattern recognition. They're nothing alike.
  • #331
  • Jun 26, 2015 9:56am Jun 26, 2015 9:56am
Quoting ephisi
{quote} For the doubters, hope youre gradually changing your minds about this market. The question shouldnt be is the market random? The question should be how do i profit from the littile nonrandom window of opportunity which lasts a few hours per pair
I dont see how this is supposed to show some randomness in the market - the market DOES move for a reason. If it was truly random however, how come my indicators point to the USDJPY being oversold and it is ready to push up to the 1.24 level?


I think that there are more profitable times than others, ie jumping on the sentiment band wagon, but if my indicators show the so called randomness (and no it is not the VPWMA -if not right, apologies i dont use this) I am sure other indicators will show the same thing... and if that is the case, then order is coming form chaos, and it shows it is not random.

I would say that 90% of my alerts I don't take, so whether my indicators filter out 'randomness' in the OPs sense, i have no idea, all i know is that they are a pretty good indication of where the market will go to next... which shows that the market is not 'random' just consolidating...
  • #332
  • Jun 26, 2015 10:07am Jun 26, 2015 10:07am
Quoting rolandW
{quote} I dont see how this is supposed to show some randomness in the market - the market DOES move for a reason. If it was truly random however, how come my indicators point to the USDJPY being oversold and it is ready to push up to the 1.24 level? I think that there are more profitable times than others, ie jumping on the sentiment band wagon, but if my indicators show the so called randomness (and no it is not the VPWMA -if not right, apologies i dont use this) I am sure other indicators will show the same thing... and if that is the case, then...
Youre right. Any signal or chart pattern that consistently beats the market has caught the non randomness of the market. Usdjpy is pointing oversold bcos tats what the big boys want you to see. Charts are not always what they seem they are most time set up to fool traders. If you look at my posts you will see that despite uj being oversold i called uj 124 in asia. By d way i dont use vpmwa. I use my eye indicator
  • #333
  • Jun 26, 2015 10:27am Jun 26, 2015 10:27am
17 pages of nothing, I think this an FF record. You should also start debating about the gender of angels once you are done discussing whether the market is random or not.

Do you also need to understand how your digestive system breaks your food's molecules before eating, how your brain registers knowledge before learning, how your muscles, bones and tendons work together before walking?

In the meantime, Gobigfx has just posted a single chart with no explanantion and yet this thread thrives on nothingness. I am impressed for all the wrong reasons
  • #334
  • Edited 1:31pm Jun 26, 2015 1:07pm | Edited 1:31pm
Congratulations to all! I think the OP is gone...(!)

I have just discovered this thread today, I have spent the last 1 - 2 hours to go through all the pages to see what was being said.

From all what I have read, YES (!!!) definitely the following points, made by other users and / or GOBIGFX, are the truth!:

A. Even if FF services & forum are great, there is a lot of crap around here, that is why I nearly never write something here. Please, come on, we all know that a lot of people around here do not make dough in the markets.... I am even one of those... who knows....
So YES of course a lot of BS is being said around here, and a lot of folks listen the crap.... any way, it should not be a reason to cut the possibility to exchange.

B. Excuse me, but I really do not see what is the BIG DEAL with what GOBIGFX said..... beside a small argument which could be possible on how many % random and non-random.... beside that it is sure that markets are like he said.

C. Yes, every moves from the smallest, to the biggest, in markets are created by the willing to buy and or to sell, different sizes, with different reasons, at different times.... yes if no big willing, and big orders, or big events bring the herd to move hard, volatility and direction will not be there, so prices behaviors will seem random, and the price will find a clear direction for anyone to make a profit (at least form a directional point of view).

D. This conversation should have been better going to a more precise, deep and full talk to understand so WHEN and WHAT TO CHOOSE, AS INFORMATION, TO GET THE RIGHT FLOW OF INFORMATION AND ORDERS WE ARE LOOKING FOR (!!!)

C. Regarding of my own understanding, and personal experience, on how markets behave, I have notices the simple but clear phenomena:
Sometime a market will be affected in the way it should by new fundamental / information flow (Ex.: positive news, going up, negatives news going low), and some other time NO WAY, whatever fundamental / information flow come, the market first reacts to it (and some time not even), then refuse it, and go the other way (or do not move). What's going on?
What is going on is that there are multiple layers of participants all acting with a different plan and purpose, some are big (institutions), some are small (retail), and some are even maybe secret, we don't even know them (could be for example some funds not visible or some government interests behind it (come one! don't tell me that you thought the power fulls in this world tell us everything about what they do or how much they could really have...))

My point is, SURE information create imbalance and imbalance create moves. The only game in town is to figure it out. Other way to say, one would be a purist, and at the top of his game in that field, one could trade purely on information, without boring him self with charts.... That was the Old-School way of the tape readers...

One last note, yes trend following exists, and actually what GOBIGFX said, at the root of his talk, do not contradict it.


Cheers,

Alex
  • #335
  • Jun 26, 2015 1:45pm Jun 26, 2015 1:45pm
Interesting subject.

Please allow me to contribute some thoughts:

1). There are many ways to make money in forex trading. (our aim is making money, right?
2). Yes, market is random. What is in the world NOt random? Everything is random. Even your mind is random. BUT,
3). this randomness is predictable. And,
4). there are many ways to do it.
5). the key is CONSISTENT ACTION.

regards,
  • #336
  • Jun 26, 2015 1:54pm Jun 26, 2015 1:54pm
Quoting antonsatu
Interesting subject. Please allow me to contribute some thoughts: 1). There are many ways to make money in forex trading. (our aim is making money, right? 2). Yes, market is random. What is in the world NOt random? Everything is random. Even your mind is random. BUT, 3). this randomness is predictable. And, 4). there are many ways to do it. 5). the key is CONSISTENT ACTION. regards,
Sure the key is CONSISTENT ACTION, as with maybe all things in life ;-)
  • #337
  • Jun 26, 2015 2:06pm Jun 26, 2015 2:06pm
Quoting Mingary
I am so contrarian that my intense "contrarianism" even applies to this statement (:
Even your smiley is back-to-front.
  • #338
  • Jun 26, 2015 2:08pm Jun 26, 2015 2:08pm
Quote
A. ...any way, it should not be a reason to cut the possibility to exchange.
Ok
Quote
B. Excuse me, but I really do not see what is the BIG DEAL with what GOBIGFX said..... beside a small argument which could be possible on how many % random and non-random.... beside that it is sure that markets are like he said.
Whatever
Quote
C. Yes, every moves from the smallest, to the biggest, in markets are created by the willing to buy and or to sell, different sizes, with different reasons, at different times.... yes if no big willing, and big orders, or big events bring the herd to move hard, volatility and direction will not be there, so prices behaviors will seem random, and the price will find a clear direction for anyone to make a profit (at least form a directional point of view).
According to you (and most others on here it seems).

Quote
D. This conversation should have been better going to a more precise, deep and full talk to understand so WHEN and WHAT TO CHOOSE, AS INFORMATION, TO GET THE RIGHT FLOW OF INFORMATION AND ORDERS WE ARE LOOKING FOR (!!!)
Supposedly the OP was meandering his way to that at some point.

Quote
C. Regarding of my own understanding, and personal experience, on how markets behave, I have notices the simple but clear phenomena:
Sometime a market will be affected in the way it should by new fundamental / information flow (Ex.: positive news, going up, negatives news going low), and some other time NO WAY, whatever fundamental / information flow come, the market first reacts to it (and some time not even), then refuse it, and go the other way (or do not move). What's going on?
What is going on is that there are multiple layers of participants...
Welcome to the world of market manipulation, that's what's "going on". Many people trade with this in mind and I for one wouldn't know how to trade if markets weren't manipulated. Although I don't see the manipulation as evil or to destroy peoples accounts, just a natural process of how the market and it's biggest participants must work.
Quote
My point is, SURE information create imbalance and imbalance create moves. The only game in town is to figure it out. Other way to say, one would be a purist, and at the top of his game in that field, one could trade purely on information, without boring him self with charts.... That was the Old-School way of the tape readers...
This statement doesn't really make any sense. Aside from that, charts are a graphical representation of the ticker tape (lacking some pieces of information like lot size etc). The "information" you're stating here is fundamentals or what?
  • #339
  • Jun 26, 2015 2:42pm Jun 26, 2015 2:42pm
My personal opinion is that the market is random with structure - meaning that a small percentage of the time a majority of traders are all observing the same market structure to the extent of forming a probability of a particular outcome (a self-fulfilling prophecy if you will). As has been stated in this discussion, this 'probability' is only presented with a small probability of occurrence.

There are many in the 'trading arena' whom I refer to as "financial mathematical gurus". Quite honestly, I believe they enjoy the math over the money. Many of these have gone back as far as 1950 observing every conceivable asset class, trading methodology, a plethora of indicators, all of this to determine if any 'edge' might present itself. Their conclusion time and time again has been that the market is actually no better than a coin flip in determining any consistent probability in regards to predicting market direction. One of the more interesting findings was that most of the tools we use in trading such as support and resistance, pattern formations, bottom and top indicators, elliott waves and the like, all ended within a probability range of 49.5 to 50.5% - again, no better than a coin toss. Any math student can tell you the improbability of accurately predicting a 'constant' with a 'variable'. As has been said - you can argue with the math but you'll be wrong. But once this is realized and understood, this can be used to our advantage to become profitable when trading any market.

As we discuss this wonderful world of trading, I am reminded of the words of General George S. Patton as he stood overlooking the battlefield, binoculars in hand, prepared, and anxious to engage - "God help me, I do love it so".
  • #340
  • Jun 26, 2015 3:08pm Jun 26, 2015 3:08pm
[quote=darko2010;8348833]17 pages of nothing, ......

Well, the thread isn't entirely baseless. On a day like today when PA has been doing a yo-yo, particularly if you trade GU, like me, this kind of thread can assist you to fight boredom. At least, you get to feel the pulse of other traders.

Randomness. In a market involving millions of traders all over the world, randomness is a no-brainer. What trading is all about is identifying the patterns and trends that the market must expose in the course of multiple and intricate buying and selling.

Forex trading is beautiful. It tasks your brain and puts you on your toes all the time. The fact that a trend is indicated does not mean it will end up that way. In this kind of scenario most inexperienced traders might even burn their accounts but the real traders still make good money out of this seeming chaos. Indeed, there are are so many good traders who are surprised that people lose money in forex. To them it sounds strange that people cannot follow the simple path that PA follows on a daily basis. The only unfortunate thing is that people who are making money from forex rarely participate in forums. They are too busy making the money than worrying about people who do not want to have the patience to truly learn the trade
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