Enough already! It's not random

Well last time I checked there were not too many radioactive nuclei trading on the NYSE so we don't really need to worry about that.

People who don't understand or who have failed at trading based on technical always always say it is impossible and the market is random. They need to replace "the market is unpredictable" with "I can't predict the market."
 
Quote from whenwood:


People who don't understand or who have failed at trading based on technical always always say it is impossible and the market is random. They need to replace "the market is unpredictable" with "I can't predict the market."
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You are almost there whenwood.

The markets are tradeable or they are not.
It is entirely up to each individual.

regards
f9
 
Quote from Brandonf:

I've always thought that the markets are a hell of a lot more random than most traders want to think they are, but they are also a lot less random than most academics think they are too.
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I agree, if you substitute the word "unpredictable" for "random".

The digits of π exhibit statistical randomness. But they are obviously not randomly generated. The next uncalculated digit of π is unpredictable, but it's not random.

The problem is that economics, despite all the numbers, is the softest of the soft sciences, and the academics were looking for a quick fix to make themselves look like physicists. So they clung to the pseudo Brownian-motion theory because it looks impressive. Wrong but impressive looking.

Lest we forget, economics is the only social science that set up a fake Nobel prize, clearly out of medal envy of chemistry, physics and medicine, which all have real Nobel prizes.
 
This site is hosted by guys that made $100 million in their own lifetime yet academics will come on here with their "proof" that it is impossible :D

I kind of hate academics anyhow, I don't agree with them on anything really, trading is another example of how smug and wrong they like to be... they don't have to be right about anything as long as they are the "experts" and control the debate and get their living from public funding same as any welfare recipient......
 
Quote from kut2k2:

Dear fellow technician, this thread is for YOU. :cool:

The next time some random walking idiot tries to rain on your efforts to find a technical edge while talking down to you like you're a small child, just direct his arrogant ass to this thread. Maybe it's not too late for *him* to learn something.

I never thought it would be this evident, given all the preaching about "proof" that the markets are random. Guess what? It's all BULLSHIT! :mad:

I just ran a little robust statistical tool called the runs test that was specifically designed to test a sequence for randomness.

First I collected 10 years of data on the S&P 500, from Jan 2 1998 to Dec 31 2007, from yahoo.

The results are:

2,514 data points
2,513 daily price changes
1,315 ups
1,197 downs
1 zero (ignored)
1,332 run sequences

Applying the runs test yields a z-score of 3.111.

The chances of that z-score coming from a random sequence of ups and downs is

ONE OUT OF 1,073 !

I got your coin-flip "chart" right here, random walkers. :mad:
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While I appreciate an empirical analysis, the Creator of the universe precludes the absurdity of randomness.
 
Quote from tropicalknight:

Even random marketers think that the market will go up in the long run.
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Actually the typical random walker rant is more like this:
Quote from MAESTRO:

If you flipped an unbiased coin 10 times and by an accident this coin has landed all 10 times on “heads” does it mean that you are in a “head trend”? Trends are the observations made on the past behavior. At any point of time the probability of the trend to continue or reverse is still 50/50. Price patterns are for idiots who have no education. It is a religion and as any religion it has rituals – one of them is trend! Spotting patterns in no pattern environment is like telling your girlfriend, “Honey, doesn’t this cloud look like a dog’s head?” If she wants you to buy her a few shiny things she would say “Yes”. Patterns, trend lines, head and shoulders and other bullshit is like dancing around the fire and praying for rain. It takes about the same level of intelligence.
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I don't think the 50/50 crowd deserves any mercy with adjustments for T-bills and the like. They set the rules ("it's 50/50, idiots!") so they should have to live with the consequences when they are PROVEN WRONG.
 
Quote from kut2k2:

Dear fellow technician, this thread is for YOU. :cool:

The next time some random walking idiot tries to rain on your efforts to find a technical edge while talking down to you like you're a small child, just direct his arrogant ass to this thread. Maybe it's not too late for *him* to learn something.

I never thought it would be this evident, given all the preaching about "proof" that the markets are random. Guess what? It's all BULLSHIT! :mad:

I just ran a little robust statistical tool called the runs test that was specifically designed to test a sequence for randomness.

First I collected 10 years of data on the S&P 500, from Jan 2 1998 to Dec 31 2007, from yahoo.

The results are:

2,514 data points
2,513 daily price changes
1,315 ups
1,197 downs
1 zero (ignored)
1,332 run sequences

Applying the runs test yields a z-score of 3.111.

The chances of that z-score coming from a random sequence of ups and downs is

ONE OUT OF 1,073 !

I got your coin-flip "chart" right here, random walkers. :mad:
More...

Now I don't think markets are random, but your post doesn't really prove anything. The Wald-Wolfowitz runs test is for a TWO VALUED data sequence.

Sorry, but the market cannot simply be broken down into 'up' and 'down'. Those 'ups' and 'downs' have magnitudes, volumes, advance/decline ratios ...

In my opinion, your test doesn't take advantage of Occam's Razor to reduce noise ... it just ends up completely slicing any relevance away...

Then again, the '50/50' coin flip is an equally pointless point ... so your counter is perfectly applicable ... if they can't see the fault in their own tests, they probably won't see the fault in yours :D
 
Dear fellow medieval inquisitor, this thread is for YOU.

The next time some “round earth” idiot tries to rain on your efforts to find an edge of the earth while talking down to you like you're a small child, just direct his arrogant ass to this thread. Maybe it's not too late for *him* to learn something.

I never thought it would be this evident, given all the preaching about "proof" that the Earth is Round! Guess what? It's all BULLSHIT!

I just ran a little robust measurement tool called “river test” that was specifically designed to test the “flatness of the Earth”.

First I collected 10 years of data on all the rivers in our area.

The results are:

2,514 rivers
2,513 turns in each river
1,315 left turns
1,197 right turns
1 zero (ignored)

Applying the “river test” to this data I concluded that none of the rivers fell from the face of the Earth simply because the Earth is FLAT!

The chances of that “river test” being wrong is

ONE OUT OF 1,073 !

I got your “round Earth theory” right here!

P.S.

10 years of S&P 500 data is just one path of a random walk. You cannot run z-score test on one run. The result is meaningless! Before you state something like that you should really look into educating yourself a bit in the probabilities theory and have a little more understanding of math. You are a simple common idiot that is trying to protect you system of dogmas and religious beliefs by attacking scientists who really understand a lot more that you ever will! I have come across of many cement heads like your self that think they figure out everything! It is very common among the decision makers (traders) to be certain about things because they simply cannot stand the uncertainty! It is your psychological deficiency that has nothing to do with the understanding of the markets phenomenon! Suffering from ADD and lack of knowledge is a very common syndrome among people like you. I don’t know what hole you crawled out of but your blindness amazes me!
 
Quote from kut2k2:

Dear fellow technician, this thread is for YOU. :cool:

The next time some random walking idiot tries to rain on your efforts to find a technical edge while talking down to you like you're a small child, just direct his arrogant ass to this thread. Maybe it's not too late for *him* to learn something.

I never thought it would be this evident, given all the preaching about "proof" that the markets are random. Guess what? It's all BULLSHIT! :mad:

I just ran a little robust statistical tool called the runs test that was specifically designed to test a sequence for randomness.

First I collected 10 years of data on the S&P 500, from Jan 2 1998 to Dec 31 2007, from yahoo.

The results are:

2,514 data points
2,513 daily price changes
1,315 ups
1,197 downs
1 zero (ignored)
1,332 run sequences

Applying the runs test yields a z-score of 3.111.

The chances of that z-score coming from a random sequence of ups and downs is

ONE OUT OF 1,073 !

I got your coin-flip "chart" right here, random walkers. :mad:
More...

You did everything but state the hypothesis clearly.

Are you saying it is not random because it goes UP more than it goes down? [1315 ups, 1197 downs] ??

If so, then you have proven nothing, because it is obvious that the markets continuously move up over time. It is pushed up over the decades by forces such as inflation and corporate profitability.

But the problem is, that buy and hold outperforms ALMOST all market timers. B&H doesn't have the trading costs.

Modern EMH is more like "random with a drift" They know it moves up over time.

Your thesis is little better than "regardless of what they say, pennies are still copper colored!!!"
 
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