Do you see patterns in Random Walks?

sheepsucker · Jan 31, 2012

Quote from HATEtheRisk:

They are pretty difficult to find, but if you have found them you have the holy grail and know the secret knowledge what all the other big traders, bankers and hedgefund gamblers know, and this secrets are there for over 50 years.

Gotta love these broad blanket statements pretending you are some kind of guru.
Reality check: Average hedge fund was down 9% 2011.

SunTrader · Jan 31, 2012

Genius guru types could save us all a lot of reading by just mentioning at the top of their post: Holy Grail.

HATEtheRisk · Jan 31, 2012

Quote from sheepsucker:

Gotta love these broad blanket statements pretending you are some kind of guru.
Reality check: Average hedge fund was down 9% 2011.

HAHAHAHAHHA

I am not a guru and neva want to be.

I am just knowing what i am talking about, man.

I am a trader and i make money, its my business and i am fucking good at it, bcuz i love it, man, its everything for me.

PASSION FOR PERFORMANCE !!!

So relax and read my post again, you might can learn something.

HAHAHAHAHHAHA

P.S.
Dont forget i am the Best in the world.
There can only be ONE.

Maybe its because i am german, we are better at everything in the world, just think about our cars. LOL.

And i bet, i am still working, while you are slepping for 2 hours.
You dont know what real trading and hard work is until you met me, but that will neva happen. LOL

Sorry i feel fucking good right now, i am in the money.

So PEACE out and good trading to you.

CoolTraderDude · Jan 31, 2012

Quote from HATEtheRisk:

HAHAHAHAHHA

I am not a guru and neva want to be.

I am just knowing what i am talking about, man.

I am a trader and i make money, its my business and i am fucking good at it, bcuz i love it, man, its everything for me.

PASSION FOR PERFORMANCE !!!

So relax and read my post again, you might can learn something.

HAHAHAHAHHAHA

P.S.
Dont forget i am the Best in the world.
There can only be ONE.

Maybe its because i am german, we are better at everything in the world, just think about our cars. LOL.

And i bet, i am still working, while you are slepping for 2 hours.
You dont know what real trading and hard work is until you met me, but that will neva happen. LOL

Sorry i feel fucking good right now, i am in the money.

So PEACE out and good trading to you.

Aren't Germans just Huns...? Think I read that somewhere... I think Attila the Hun had the same attitude and look what happened to him.

Also your spelling sucks! You're not better than anybody at that!

SunTrader · Jan 31, 2012

.........

Maybe its because i am german, ... [/B]

That explains it all.

CoolTraderDude · Jan 31, 2012

I just realized the question in this thread is contradictory...!:eek:

Patterns

A pattern, from the French patron, is a type of theme of recurring events or objects, sometimes referred to as elements of a set of objects.

These elements repeat in a predictable manner. It can be a template or model which can be used to generate things or parts of a thing, especially if the things that are created have enough in common for the underlying pattern to be inferred, in which case the things are said to exhibit the unique pattern.

http://en.wikipedia.org/wiki/Pattern

Random Walk

A random walk, sometimes denoted RW[citation needed], is a mathematical formalisation of a trajectory that consists of taking successive random steps. For example, the path traced by a molecule as it travels in a liquid or a gas, the search path of a foraging animal, the price of a fluctuating stock and the financial status of a gambler can all be modeled as random walks.

http://en.wikipedia.org/wiki/Random_walk

So if it's a real "Random Walk" then you can't have patterns... Because patterns have to be repetitive... On the other hand, if there are repetitive patterns then it isn't a real Random Walk.

My answer is to combine the two... I'll say that you do have "patterns" in the market but that their intervals and intensities are random which makes them relatively useless for predictions. In a sense, Fractal Geometry applies really well to the market...

While I was using technical analysis to trade my "pattern recognition" would kick in and then... The pattern I thought would emerge turned into something else. I haven't had good experiences with patterns in the markets. It's really hard to assign significance to every formation. But... If you've found a way to do that then you should be able to make a lot of money off of it.

Lights · Jan 31, 2012

Quote from HATEtheRisk:

Sorry, but people who say there are no patterns in the markets, do not know anything about trading.

The market itself is a matrix of patterns, its exist only of patterns.

I would say there are about 5 - 10 major patterns for all time frames and them you can split again into 5 or more of each of them, because so special are some situations.

But the markets, and i mean all markets, are a repetation of pattern, over and over again.

The only random thing is the so called noise inside the lower time frames of the patterns, but this is still not 100% true, because this moves are also rules by lower timeframe patterns.

Its all about testing and retesting Highs and Lows. Thats the market.

This is the truth, because i know what i am talking about, i am trading a few of this patterns.

They are pretty difficult to find, but if you have found them you have the holy grail and know the secret knowledge what all the other big traders, bankers and hedgefund gamblers know, and this secrets are there for over 50 years.

You just have to study the price history and read it correctly.

first, no pattern works 100% of the time. having said that, reason why a set of patterns will work is that at a particular time in the bull/bear cycle they symbolize what the herd is NOT doing. this is called 'trend'. but it is musical chairs and the trend finally ceases once the herd flips, and stops and a new set of patterns symbolize the current nature of the herd.

in it's purest form, T/A is understanding what the majority ie the herd is not doing.

SunTrader · Jan 31, 2012

Trading pattern failures can be far more lucrative than looking for trades when they work.

For some, though not me, it is hard to go against the crowd.

Random.Capital · Jan 31, 2012

Markets can really only do a few things.

They can move somewhere, or they can move nowhere. They can do it quickly, or slowly.

Everything else is secondary, at most.

Lights · Jan 31, 2012

Quote from SunTrader:

Trading pattern failures can be far more lucrative than looking for trades when they work.

For some, though not me, it is hard to go against the crowd.

During a bull/bear cycle, a strategy of fading patterns will have it's time. In fact every strategy has it's time. What makes market seem "random" is that it's musical chairs and shuffles patterns based on what the herd is not doing.

an example is breakout patterns may be working for weeks. suddenly they don't. why? because the herd is jumping on breakouts causing alot of long open interest. which is just large future sales. in this part of the cycle, it would pay to fade the breakout pattern. the grail is knowing where the herd is and identifying their collective behavior. t pays almost all the time to fade the herd but as the prev author says, it is the most difficult thing a human can do since most humans are stuck in their animal side.