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Forex Dream Chasers - The 90% rule of randomness

  • #361
  • Jun 28, 2015 10:34am Jun 28, 2015 10:34am
The main reason traders lose is because everyone thinks he can turn on the 99$ EA that he bought and it will turn him into a billionaire over night while he's playing golf.. The number of those that really do trade manually is in those 10% of winners..the rest try to trade manually, burn the account and then hear those demagogic definitions that they need to remove the human element from trading, that way they will be profitable. Well one news for you..unless you are living in the world of Transformers you will never be able to make something with EA or other trading algos. The only even remotely successful was HFT trading and I am reading news that are for banning HFT trading altogether.

No EA, will be able to supplement for traders experience and intuition.
  • #362
  • Jun 28, 2015 7:04pm Jun 28, 2015 7:04pm
Quoting jmn5611
{quote} Most random generators are not truly random. They assign "random" numbers based on math formula. If you google you will see this. As far as TA being useless, I would simply ask, what do you mean by useless?
I wasn't disputing that... But that's not relevant because we model the RNG as random, i.e. it's random for our purposes
  • #363
  • Jun 28, 2015 8:36pm Jun 28, 2015 8:36pm
Quoting Gobigfx
{quote} Yes it will look exactly like that on the micro scale but because 10% of the time prices will move in a directional bias based on fundamental underlying factors the perception will be viewed as logical and non random. Focus on the non random and you find profits.
Dear Gobigfx,

Could you please point out which things are non random?


Best
  • #364
  • Jun 29, 2015 3:48am Jun 29, 2015 3:48am
I think we need to define what the OP means by 'random' to truly understand where he was coming from.

For me Random in this context means that it can not be predictable, and patterns do not emerge over and over again.

Which is just false, as I am currently proving with the MOEs...

As to the number generators... lets take a look at a shorter term market... betting exchanges. They work in the same way as the markets, if you pick a horse, you can pull up a graph of price over time, it is subject to change by big orders, it is governed by bringing buyers and sellers together.

The price looks the same as Forex to all intents and purposes.

However, Group theory prevails, where if there is a strong sentiment, the price moves WITH that sentiment. So if the horse is running away from the pack, it you win less (the price drops). Of course this is absolute, as once the race is over, the winner is at a zero price… However, within the price graph, you can still see the trends over time- Lots of ‘random’ orders coming in, with a clear direction of the trend over time.

The other thing that makes me sceptical of the OP’s assumptions, is that through market triangulation, there is correlation between currencies – there is a thread called trading mathematically or something along those lines, with the idea of hedging 3 currencies against each other.

Surprisingly, (or not!), there is very little difference (accounting for spreads and commissions). In a true random market, or using the random number generators, having this correlation would not be possible.

If we are talking about ‘randomness’ as having a trend and then a consolidation, then the OP has struck on something that has been known for since the beginning of the markets.. hardly ground breaking stuff, as Bollinger Bands, Multiple MA’s, Williams % range, Stochastics and pretty much every other indicator can show you an overbought, or undersold instrument, and you don’t play in these conditions – as it is a whipsaw.

The psychology behind this is very simply explained as well, so this whole ‘mystery’ angle is just a ‘this is a way I trade’.

What would be MORE impressive if we could have some proof of how this performs, although as the OP says, this is how he traded as a dealer, not as a retail trader – he says that he failed making the transition, so we have to assume that the VWAP method the ‘pros’ use, does not fit for retail… After all, if it was successful for the pros, I would be using it for myself!!!
  • #365
  • Edited 4:17am Jun 29, 2015 3:58am | Edited 4:17am
random = ranging market
non-random = trending market
  • #366
  • Edited 8:33pm Jun 29, 2015 5:42am | Edited 8:33pm
Quoting yonnie
random = ranging market non-random = trending market
hm, make sense, but I still want to hear from Gobigfx.

How about if I say :
non-random = high supply/demand based on disaster/political/fundamental news
random = no disaster/political/fundamental news and no clear exceeded supply or demand that drives the market

In short, we trade only forexfactory.com high impact fundamental news + political news = non ramdom?
what do you think?

Just another thought.
  • #367
  • Jun 29, 2015 7:56am Jun 29, 2015 7:56am
yea, i hope op could explain more detail about this

Quoting n00bita
{quote} Dear Gobigfx, Could you please point out which things are non random? Best
  • #368
  • Jun 29, 2015 8:06am Jun 29, 2015 8:06am
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....
Well said!
By the way, are you taliking about s&p500?
Ubi maior minor cessat
  • #369
  • Jun 29, 2015 8:06am Jun 29, 2015 8:06am
Quoting hieronymus
{quote} {quote} 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.
thank you
Ubi maior minor cessat
  • #370
  • Jun 29, 2015 9:29am Jun 29, 2015 9:29am
Quoting FXMori
{quote} Well said! By the way, are you taliking about s&p500?

Yes,

The SP is certainly one market that clearly shows non random movements on detailed analysis
  • #371
  • Jun 29, 2015 9:56am Jun 29, 2015 9:56am
Quoting Hurst
{quote} Yes, The SP is certainly one market that clearly shows non random movements on detailed analysis
and what would be your call about it?
Ubi maior minor cessat
  • #372
  • Jun 29, 2015 3:35pm Jun 29, 2015 3:35pm
Quote
Once the market leaves VWAP "we" the largest of the large will have to either A. Stop buying or selling or B. We will have to accelerate buying or selling to make sure we don't get screwed by the other bigs.


So are the two points on the chart correct with Yours A and B
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  • #373
  • Jul 3, 2015 4:24pm Jul 3, 2015 4:24pm
Quoting jmag
This is a random generation of 500 numbers, -3 to +3, each added to the previous. Amazing. We have S/R and trends and ranging. {image}
lol even m or w paterns n reversal S turns to R break out paterns whole 9 yards... love it..lol
  • #374
  • Jul 23, 2015 5:41pm Jul 23, 2015 5:41pm
So I have been busy training some new traders at my firm over the summer but its been awhile since I started this thread and I feel its time to look at some reality.
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  • #375
  • Jul 25, 2015 10:28am Jul 25, 2015 10:28am
So, this is simply a news trading technique right?
  • #376
  • Jul 25, 2015 1:53pm Jul 25, 2015 1:53pm
Quoting reizamv
{quote} yeah and make a profit not just a comment..
My guess with negative pips and positive profit is that you use a martingale strategy that too on scam broker instaforex which values a pip 10 times less as a four digit broker(an excuse !lol!) or use your strategy on any other broker than instaforex.Martingale is the only way that has negative in pips and positive in profit,First show us positive pips in yearly section.Then, we accept that you are a winner.
  • #377
  • Jul 25, 2015 8:34pm Jul 25, 2015 8:34pm
just scanned this thread and wanted to make a few comments. The forex is the most predictable and manipulated market in the universe. The perception of randomness is a function of information and knowledge, where the less information and knowledge you have the more random things appear, and the more information and knowledge you have, the greater the chance you will avoid trading in a random market. If you are trading the same pairs every day, you are likely trading during times where those pairs are in equilibrium, which not only adds to your perception that the market is random, but also greatly reduces the size of your margin account. But in addition, if you don't know that you are trading in a non random market, and simply don't know when to enter, what your targets are, where to set your stops, etc, then you likely experiencing the same results as you did trading in a random market. So for you everything is a random mess.

To those who post randomly generated charts, and compare those charts to a forex charts. There is a big difference between your charts and trading forex charts. No clear thinking person would trade your random number generating market. However, when the Bank of Australia announces it is going to reduce the AUD, you can, with relative certainly, sell the AUD$. If you can't make money when everyone on earth is selling a pair, then the notion of "random or not" is the least of your problems.
  • #378
  • Jul 26, 2015 1:44am Jul 26, 2015 1:44am
Quoting GEfx
To those who post randomly generated charts, and compare those charts to a forex charts. There is a big difference between your charts and trading forex charts. No clear thinking person would trade your random number generating market. However, when the Bank of Australia announces it is going to reduce the AUD, you can, with relative certainly, sell the AUD$. If you can't make money when everyone on earth is selling a pair, then the notion of "random or not" is the least of your problems.
IMHO

"when the Bank of Australia announces it is going to reduce the AUD, you can, with relative certainly, sell the AUD$."
Fundamental = Funny mental
The market just loves "relative certainty"; it gets your money every time (:
Actually, this prediction of "relative certainty" caused by some anticipated event re-enforces price randomness.
  • #379
  • Jul 26, 2015 10:14am Jul 26, 2015 10:14am
I think most traders lack the skills to understand fundamental analysis. Most lack the skills to understand TA, too. I like to think I've mastered both to some degree. Look at the following chart. Is there cause and effect (B of A announcement), with follow on established patterns that are predictable and reliable (traders doing what the always do); or is it all a result of randomness (the fact that everyone is selling this had nothing to do with the B of A announcement)? Are there periods when the market finds equilibrium and is difficult to trade? Yes. Is it predicable that the market will enter these periods? I think so. When structure and patterns sync up again can you find a place to enter trades? There are times when structure says sell, and times when it says hold (and actually at the 4H level you can find good time to buy, too). I guess the difficult part for some people is knowing which is which.

Edit: If you look at the NZD, EUR, GBP, CAD, and JPY, you can piece together the same kind of narrative as the one presented for the AUD. And let me suggest that once you get this, go to the exotics for some really fun action.
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  • #380
  • Jul 26, 2015 10:33am Jul 26, 2015 10:33am
Quoting GEfx
I think most traders lack the skills to understand fundamental analysis. Most lack the skills to understand TA, too. I like to think I've mastered both to some degree. Look at the following chart. Is there cause and effect (B of A announcement), with follow on established patterns that are predictable and reliable (traders doing what the always do); or is it all a result of randomness (the fact that everyone is selling this had nothing to do with the B of A announcement)? Are there periods when the market finds equilibrium and is difficult to trade?...
as usual theory after the fact
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