Predicting randomness

Making Money

If the market were random it would be possible to make money with proper risk management and trade sizing.

In a non random market with this same risk management the sky is the limit.

It really comes down to TRUTH (reality) as UNIVERSAL truth more and more approaches ULTIMATE truth.

Although in this situation your opinion or perception nor my opinion or perception of TRUTH has any influence on ULTIMATE TRUTH. It is what it is. However, if your believe and approach the market as though it were random, whether it ultimately is or is not, for you I suspect it may as well be.

As I mentioned earlier (I was being serious), when I get time I will write a book with my market formula(s) which show logically and prove mathematically the market is not random.

Many people equate an outlier as being a black swan. But as I recall a black swan is used in proving all swans are not white.

I have discovered a black swan as it relates to market randomness and RANDOM I assure you it is not. Although, I will admit to most it would appear so.

This doesn't mean many random walk believers may not be able to make money in or from the market.

What it does mean is that many non random walk believers will be and are able to make consistently HUGE amounts of money in or from the market.

I certainly don't mean to flame you. I wish you well with your research (keep an open mind and keep looking for that black swan) and also luck and success in your trading.
 
Quote from Equalizer:

Thats way Cool, a fellow Holdsworthian!
Yeah, all my ex-girlfriends thought his stuff sounded random - but they thought the same of John Coltrane and Mike Brecker, they didn't mind Scott Henderson and Eric Johnson, or Mike Landau (those 6 guys are my major influences).

Funny how it sounded random to them, (but to me Allan's music is some of the deepest stuff out there. He is my fave.)
Kinda like people's perception of prices! :D

Kid Charlemagne? I never really learned any of Steely Dan's tunes - probably since I was too busy working on perfecting all sorts of stuff like that opening guitar/Synthaxe line on Holdsworth's "Non-Brewed Condiment". A finger buster!

I better get off before the chit-chat Nazi's attack us :D
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Yes, the inability to understand order in chaos is always and everywhere the product of a lack of understanding and wisdom, or in your example, music appreciation skills.

I'll pm you regarding guitar stuff.

Cheers
ES 335
 
Quote from NUTSNEAL:


If the market were random it would be possible to make money with proper risk management and trade sizing.
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You're on the road for the Nobel Prize in Economics...

...and perhaps the one in Physics as you just demonstrated how easy it is to go against the entropy principle...

:D
 
To unfamiliar eyes, musical notes on sheet music might appear random. The same can be true for people looking at words written in a foreign language.
 
Given that there are traders who built billions in personal wealth. If the markets were random, guys like Stevie Cohen and Covner would have to call a coin flip right 500 straight times to build that wealth.

There are random facets to the markets, but skill and foresight supercedes it.
 
I'm sorry, I tried, but I couldn't let this go...

I think your definition is self- fulfilling

Since if you define a top because price has subsequently moved lower...what will it next create but a bottom...and following on from your definition - if to see a top we need a bottom of course they will sequential...

And I'm not too surprised to learn that we get highs and lows at extreme level either...

I'd love to discover some deep insight in what you said, but I'm not sure there is one.

Quote from Charlie Dow:



....Price is totally random in its movement but let's look at it's flawless consistencies.

1 - Price continuously oscillates creating tops & bottoms. (waves)
2 - Once price creates a top it will oscillate to create a bottom.
3 - Those price tops and bottoms occur sequentially, one chart at a time.
4 - Those price tops and bottoms occur at both extreme levels (High Tide/Low Tide) and levels that aren't extreme (waves). [Tracking those levels create definable, readable and tradable trends]

.....
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Quote from muppet:

I'm sorry, I tried, but I couldn't let this go...

I think your definition is self- fulfilling

Since if you define a top because price has subsequently moved lower...what will it next create but a bottom...and following on from your definition - if to see a top we need a bottom of course they will sequential...

And I'm not too surprised to learn that we get highs and lows at extreme level either...

I'd love to discover some deep insight in what you said, but I'm not sure there is one.
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The epiphany comes with the realization of trading in a flawlessly accurate environment that is completely contained. Everything I look is taken for granted in trading circles, I just put them all together in a controlled (not manipulated) environment. The deep insight is the environment not the price action outcomes.
 
Quote from NUTSNEAL:

If the market were random it would be possible to make money with proper risk management and trade sizing.
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If the markets were truly random in all time frames then I am inclined to disagree, even ignoring transaction costs (slippage and commission). However, I am willing to consider evidence to the contrary and revise my opinion if necessary. Have there been any such studies performed using, say, Monte Carlo simulation incorporating truly random price changes? If so, what sample sizes were used and how often was the test repeated to ensure the reliability of the outcome?

Further, if you truly believe what you say, then may I suggest that you find a time frame that you consider fairly random and blindly enter markets at random intervals with the direction to be determined by the flip of the coin. Then work your risk management magic and report back to us. I would be pleasantly surprised if you had anything positive to report, but I will try to keep an open mind.
 
Quote from Thunderdog:

I would be pleasantly surprised if you had anything positive to report, but I will try to keep an open mind.
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You don't need to keep an open mind, he simply can't.
 
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