Is Daytrading a Random Event?

perhaps a bad choice of words, but my point is that i am astonished that anyone (even our esteemed member dark) would attempt to quantify this. to put it in dark's words, that is pretty arrogant (and presumptuous). i mean holy cow where did these come from? why not 2 to 6%. or 1/2 to 3%? :-/
 
Originally posted by peter77
The markets aren't random, they just go up and down a lot.
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If they didn't go up and down often, what else would markets do?
 
Originally posted by cmz1

here's what i've concluded:
1)put on a trade long or short you've got a 50-50 shot
2)with the resources of market makers and specialists who you
compete with and your odds drop.
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Can anyone see the flawed logic here?

A random trade, ie, go either long or short on a coinflip, and your odds are 50/50. Now factor in MMs and specialists and your odds DROP?? That alone kinda beats the idea of randomness.

Am I nitpicking? I say not. These aren't just off the cuff remarks made by cmz1, this is what he has CONCLUDED ( I assume from all his experience and observations.)

Well, I say, if there's something so obviously wrong with his thinking, I'm not sure I want to pay too much attention to his opinions. Oh, wait a minute, I never did anyway.

 
looks at my journal for last week, thats living proof that the markets are predictable. There is a mathematical formula for every days high and low.

just cause u can't see it, doesn't mean it isnt there. :p

and it doesnt mean no one else can see it. :cool:

open your eyes :D
 
I just realized all this money in my pocket is random.

Hmmm, I think I will go and seperate some more random money from the players that take 50/50 shots.

nitro

PS After writing this, I realized that I couldn't take money from the traders that are taking 50/50 shots on the way in, as that would imply that I was taking a 50% shot myself - God forbid. Hmmm, some of this random money must be the random players on their way out - Buuuuut wait, If the random players are on the way out when I am on the way in, that would again imply that I was taking a 50% shot!!!

Ugh, I guess I am not taking any money from the random players after all - Duh....

Buuuuuut wait once again - let's assume that _EVERY_ single player out there other than me decided that they should flip a coing on when to get in, and flip a coin on when to get out - then my expectation on the trade would be 50% on the other side as well!? How can this be - if I had perfect information (e.g., I had inside information) about the trade, I would always have greater than a 50% expectation, yet the person on the other side of my trade has a 50% expectation?

Now I really need to sleep on this one...
 
Originally posted by nitro
I just realized all this money in my pocket is random.

Buuuuuut wait once again - let's assume that _EVERY_ single player out there other than me decided that they should flip a coing on when to get in, and flip a coin on when to get out - then my expectation on the trade would be 50% on the other side as well!? How can this be - if I had perfect information (e.g., I had inside information) about the trade, I would always have greater than a 50% expectation, yet the person on the other side of my trade has a 50% expectation?
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The only way you could have inside information on the trade is if you somehow knew which ways the coins were going to flip. (Fundamentals would be meaningless if everyone were flipping coins) The problem is, once you know this, you are going to be competing for fills with the coin flippers who have the same side as you. If you take the fill from one of them and you are also taking money out of the market, then the coin flipper's expectations would be somewhat below 50%. Also, if the coin flips can be predicted by you, it would be kind of hard to call them random.
 
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