is market random?

is market random

  • yes

    Votes: 9 16.1%

  • no

    Votes: 17 30.4%

  • not all the time

    Votes: 19 33.9%

  • does not matter

    Votes: 11 19.6%
  • Total voters
    56
Overnight said:
I'm one of the ones who answered that it does not matter.

Because it doesn't matter what we preconceive the market to be. It can be perceived to be random, or not. But what does it MATTER? So long as we recognize the PATTERNS in the randomness, the order in the chaos? That is where we succeed.

That is not the thinking of a degenerate gambler, I would hope. If it is, then I am a hopeless and degenerate gambler who will fail miserably because I did not realize that the market is won only by luck.

And if luck is the only thing that will help traders, then I am truly dead, because I have no luck at all. My fucking journal proves that.
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you have a point.
it is market activity -buying and selling-and the effect it has on market.
i believe it is relative strength of the buyers and sellers that drive market movements.
this relative strength may be deduced from market movements
incidentally i too answered 'does not matter '....and i believe that.
 
kandlekid said:
No, and here is my proof. Take a security. Any security. Equity, future, etc. Remove all of the market participants. Every one. With all of the market participants removed, if the price of the security moves, then the market in that security is random. If it does not, then the market is not random.
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good point
are traders buying and selling randomly?

they are all trading because of some reason,whether they are right or wrong is another matter.

mathematicians will talk like mathematicians.

i do not think probability can be applied to a situation where the outcome may be influenced by outside interference:GS has enough money power to prove any mathematician, or the theory of probability, wrong if it was not illegal to do so.
 
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RedDuke said:
If market is random how does one explain continuous climb higher
Of stock market over
Last 70 years ????
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market index moves higher because that is inflation. similar to bank interest.
how about intraday market, do you think it is random?
 
Seeing the price respects major MAs, I see this is not perfectly random........ Even random walk should not be perfectly random. The walk should avoid dog shit for example....
 
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why did i vote does not matter.

i think that money can be made even if market is random.

and i believe that market movements

does random mean that market movements have no reasoning or logic......? or is there any other definition.
 
Huh? No, if you flip coins there is no trend in anything, simply because there is no drift component in the stochastic path of each series of coin flips. Running 1000 series of 10 coin flips you end up with about 50% values above where you started and 50% below. Coin flips are a poor example to describe asset price behavior. Stocks have an up drift component because of value creation that shareholders participate in. Futures prices can exhibit drift depending on the underlying but generally they don't. Fx prices don't at all exhibit drifts

What market practitioners describe as trends are from a statistical forecasting perspective purely random outcomes. Even when flipping coins often enough there may be 10 heads in a row by mere chance. However there is a component that is causing non random events, those are what I call catalysts of statistically significant cointegration. The timing of them is again random and cannot be predicted. But subsequent outcomes are not random. The duration is random, the timing is random which makes prediction a futile approach to trading and which makes trading on trend changes a statistically sound approach. The devil is obviously in the detail but most retail traders do not even comprehend the above to begin with.

gaussian said:
Am I not supposed to be critical of someone who puts ES margin down, closes their eyes, and hits throws a dart at a dart board?

It certainly matters if the market is random or not.



Look up Brownian Motion.

If you're not into the math create a diagram by starting with one node. Flip a coin. If heads, its an up day, if tails it's a down day.

Your average will have a certain amount of trend to it. This is why quantitative finance is based on the log return series and not prices.
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GRULSTMRNN said:
Huh? No, if you flip coins there is no trend in anything, simply because there is no drift component in the stochastic path of each series of coin flips. Running 1000 series of 10 coin flips you end up with about 50% values above where you started and 50% below. Coin flips are a poor example to describe asset price behavior. Stocks have an up drift component because of value creation that shareholders participate in. Futures prices can exhibit drift depending on the underlying but generally they don't. Fx prices don't at all exhibit drifts

What market practitioners describe as trends are from a statistical forecasting perspective purely random outcomes. Even when flipping coins often enough there may be 10 heads in a row by mere chance. However there is a component that is causing non random events, those are what I call catalysts of statistically significant cointegration. The timing of them is again random and cannot be predicted. But subsequent outcomes are not random. The duration is random, the timing is random which makes prediction a futile approach to trading and which makes trading on trend changes a statistically sound approach. The devil is obviously in the detail but most retail traders do not even comprehend the above to begin with.
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if you flip a coin the coin flipper cannot influence the result

but the result of asset prices can be influenced simply by controlling demand and supply
 
kandlekid said:
No, and here is my proof. Take a security. Any security. Equity, future, etc. Remove all of the market participants. Every one. With all of the market participants removed, if the price of the security moves, then the market in that security is random. If it does not, then the market is not random.
More...
Bingo! Our Taleb disciple in another thread would not answer “what is market activity”.

I had asked (don’t remember the exact amount) him what makes a market move 1 tick or 20 tick....etc. He responded “market activity”. I then asked what is market activity. No answer as of yet.
 
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