About the relationship between randomness and volatility

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Hello everyone.


Suppose there is a trend in the market.

How do you know it's a real trend and not random?


If the volatility is high, will it be easy for a trend to emerge even with random price movements?

If the volatility is low, is the trend likely non-random?

Or is there some other way to determine if it's not a randomly generated trend?


I would appreciate it if you could give me some ideas and reference sites.

 
valenciaorange: Suppose there is a trend in the market. How do you know it's a real trend and not random? If the volatility is high, will it be easy for a trend to emerge even with random price movements? If the volatility is low, is the trend likely non-random? Or is there some other way to determine if it's not a randomly generated trend? I would appreciate it if you could give me some ideas and reference sites.

You never know! You only know after the fact. All you can do is judge the probability based on past behaviour and/or fundamental behaviour, but you can never know for certain.

That probability is highly dependant on the symbol, the time-frame, the current market conditions and on fundamentals that may be behind it, but it's not easy to establish.

If it were easy to predict then everyone would be able to do it.

 
フェルナンド・カレイロ # :

過去の行動や基本的な行動に基づいて確率を判断することはできますが、確実に知ることはできませ ん 。

その確率は、シンボル、時間枠、現在の市況、およびその境界にある可能性のあるファンダメンタルズに大きく依存しますが、確立するのは簡単ではありません.

予測が容易であれば、誰でも予測できます。

thank you for your reply!
I'm happy.
I think that only after the fact will we know whether the trend will grow or not.
Complexity science also suggests this.

By the way,

In the book evidence based technical analysis,

There are many descriptions of randomness.

If we can measure the degree of randomness even a little,
I thought I could get an edge in trading.

do you have any ideas?
 
valenciaorange #: In the book evidence based technical analysis, there are many descriptions of randomness. If we can measure the degree of randomness even a little, I thought I could get an edge in trading. do you have any ideas?

I have not read that book, so I am unable to answer.

 
Fernando Carreiro #:

I have not read that book, so I am unable to answer.

It's a great book.
It is expensive, but it is recommended.
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