Your Market Beliefs - page 4
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Isn't this the proof that the market is not 100% random ?
Hi Michel,
I'm wrong on direction and timing approx 70% of the time. For me personally, winning came with the creative use of leverage (which can also be categorized as money management), and fading my positions. I would consider my understanding of price action better than average (spent my first 3 years of trading married to a computer monitor), yet my hit rate and timing still generates a fairly low accuracy. Maybe I'm just a lousy chart technichan... or maybe my market beliefs are spot on - at least for me.
Mr.Marketz;
if someone is making money from a method that suggests the market is random then its very difficult to convince him/her otherwise, and the opposite is true if someone is making money from a method that suggest the market goes through cycles then it will be difficult to convince him/her otherwise.
at some stage of my trading I was 100% convinced that the market is random, at a later stage I was 100% convinced that the market goes through cycles .
People stand for what they believe, it as a religious, and I don't blame them as long as the method makes money for them ....
but even random methods are subject to cycles , and they are biased by the trader or the rules used in the method
Scott is an FF member, he had some personal notes on his web site about this topic you can check them out
FOREX Statistical Research Center/Beyond the Random Walk - A New Market ParadigmThanks for the link, Mini Me. I want to be clear on this. My beliefs (perceptions) are only relevant to me. Our reality is inside our minds... as in, not in the real world. These are some of the truisms I have, in regards to markets:
- Price moves randomly.
- Eventually, people on the profit side of a trend will want to "cash out" their orders.
I think that's pretty much all I've been able to conclude after 5+ years of this.
Thats what made the difference with me too.
As you can see beleif is like religion you must have it and it must be well defined to play this game. It must also be derived from markets not what you wish to see. I happen to agree with iGoR on every thing we may have a difference in our differention of presistance, however. Never saw it explained as rainy days and nights.
Theres one more thing you may want to make note of with this poll I will PM you with the idea so as not to bais the results till your done here.
KeitThanks, Keit. Replied.
How do you explain "trend"
A trend is nothing more than a random sequence of consecutive up or down price movements. A range is the same random movement without the chronological sequence.
"chronological sequence" I see...but wait you are not Igor....
A trend is nothing more than a random sequence of consecutive up or down price movements. A range is the same random movement without the chronological sequence.
A trend is nothing more than a random sequence of consecutive up or down price movements. A range is the same random movement without the chronological sequence.
But dont you find it strage how these supposedly random events happen far more frequently than you'd expect by random chance ? how can you explain that ?
If you create a synthetic time series using excel, you'll see charts that look pretty much like real charts. You'll see trending type behaviour, higher highs and higer lows, you'll see ranges, breakouts, area's of low volatility, triangles, head and shoulder patterns, support and resistance etc.
If you stick indicators on these random synthetic time series you'll see oscillator divergence, moving average cross overs, bounces from bollinger bands etc.
If you stick fibs on these synthesised random timeseries you'll see price bouncing off fib levels.
Despite similarities in microstructure, these synthesised timeseries differ from the real markets on a macro scale, and they differ in all timeframes.
The Bank wanted certain movement ("fixing" for an export contract). A quant wrote the program to literally goose the price to start in the desired direction... All the TA guys in the Forum all jumped on the Random Trend that appeared and goosed the cascade that was started by the bank (this takes millions of dollars)....well the market played itself out for a couple hundred pips and the Bank got what they wanted...Ha Ha Rofl....
Which pretty much says the same as my initial post "random events (in this case a bank who wished to influence price) create situations that experienced operators may choose to respond to and exploit on a strategic level, and its the effects of those responses that lead to systematic patterns that are exploited through technical analysis"
The trend once in place wasnt random, the catalyst for that trend was a random event.
I had the opportunity to converse with a friend on a trading floor at an unnamed bank and experienced first hand (while on the phone) how the "cascade" was initiated to the market, when the Bank wanted certain movement ("fixing" for an export contract). A quant wrote the program to literally goose the price to start in the desired direction...But retail traders that think they know something, call this "Random" zupcon..
The very existence of "directional consecutive" will disprove "random" in itself...the word "consecutive" is really enough for the oxymoran to ring true...
ES
P.S. This was experienced and posted publically at Elite Trader 5 years ago....in front of witnesses...that thread is burned over there in the archives. This trader received the phone call from the Currency room trader and posted me a heads up...then we went on the Forum to confirm (after the move was made hehe)...This so called "Random" cascade was initiated by a bank. All the TA guys in the Forum all jumped on the Random Trend that appeared (hehe) and goosed the cascade that was started by the bank (this takes millions of dollars)....well the market played itself out for a couple hundred pips and the Bank got what they wanted...Ha Ha Rofl..."Random position". By the way there is no primary or secondary market in Forex...there is just the telephone...
HeHe..I have not disagreed with one of your posts...I was hoping that some others could read them very carefully. Thanks zupcon...
ES
Which pretty much says the same as my initial post "random events (in this case a bank who wished to influence price) create situations that experienced operators may choose to respond to and exploit on a strategic level, and its the effects of those responses that lead to systematic patterns that are exploited through technical analysis" The trend once in place wasnt random, the catalyst for that trend was a random event.
Zupcon & ES,
There is no right or wrong answer here... like MiniMe said, "whatever makes you money". I don't have a banker friend who calls me with hot tips. All I have is a price feed. This price feed forms textbook set-ups on one time frame, while creating completely contradictory textbook set-ups on another - eventually responding to a set-up on a third. I'm not trying to crunch quant equations in order to achieve favorable probability. I had given up on this approach a while back - it's far too laborsome, and doesn't seem to swing the odds in any single direction. Come to think of it, if markets are NOT random we would probably see far more success in the automated trading realm.
Again, I did not intend to debate this issue. I just wanted to gauge where peoples heads were at. The bad news is most members are not responding to the poll (everyone must be busy testing the newest version of "Won't Make You a Dime V342" EA) . The good news is that everyone who has participated in this discussion has shared some really insightful concepts.