Random Market PROOF

Quote from Pa(b)st Prime:

The shorter the time frame the more random the price action.

Betting on the Patriots to win the game is less noisy than predicting if Brady will complete his next pass.

Obviously market events aren't truly random. No human action is predicated upon a coin flip. Rather though a traders ability to measure minutia is a diminished exercise.

In the MACRO markets are far from random. Think of trends. Would anyone suggest that each of the worlds stock markets randomly generated plus vs minus ticks of such magnitude over such a large sample? Of course not. The direction of the next 2 ES points? Not random either but based on our limited ability to forecast those next prices might as well be drawn out of a hat.
More...
Well said.
 
Quote from BSAM:

Correct. Does this mean markets are not random?
More...

It really does not matter whether one believes it to be random. It is like ranting how good a team is on paper but they keep losing. All that matters is what happens in the market day to day and it certainly is not entirely random.
 
Turn a 50 year Dow weekly chart upside down. Then you will see that markets are only partly -not profitable- tradeable.

Some stockmarket question to answer:
Why are crashes always down and fast?
Why is vola rising when market drops?
Why is there a crash after market went too high( 29, 87, 00 )?
Why is there no big crash when market is in a downtrend?
Why is a 1 minute ES chart looking like a random generated chart( hint: How much money in the market is from daytraders ( not counting marketmakers - they just eat slippage!! ))?
Is the overall long/short ratio 50/50 or more like 80/20?
 
Quote from optioncoach:

It really does not matter whether one believes it to be random. It is like ranting how good a team is on paper but they keep losing. All that matters is what happens in the market day to day and it certainly is not entirely random.
More...

Coach---

Anytime you or I put on a trade, it can go either direction. I don't care how many times you've seen the pattern before or what the news is. Each trade is unique and no trade is certain.

However, if I understand your first sentence, I too subscribe to the idea that it really does not matter whether one believes the market he is trading is random or is not random. It's whether he wins or loses that matters.
 
When you make money consistently the market is predictable. When you lose more than you win the market has to be random because afterall, you are an intelligent person, and there is no way an intelligent person can consistently lose money.:D
 
Quote from ProfitTakgFool:

There is a lot of debate as to whether the market is random or not.
More...

Question for you, PTF.

Do you believe that human group behaviour is predictable or unpredictable? I won't bother with examples, I think it's pretty obvious that there are recurring situations in which the decisions of humans in groups could be statistically analyzed to see if they were random or not.
 
Quote from Fishbird:

Turn a 50 year Dow weekly chart upside down. Then you will see that markets are only partly -not profitable- tradeable.

Some stockmarket question to answer:
Why are crashes always down and fast?
Why is vola rising when market drops?
Why is there a crash after market went too high( 29, 87, 00 )?
Why is there no big crash when market is in a downtrend?
Why is a 1 minute ES chart looking like a random generated chart( hint: How much money in the market is from daytraders ( not counting marketmakers - they just eat slippage!! ))?
Is the overall long/short ratio 50/50 or more like 80/20?
More...

A. Because fear is a stronger emotion than greed.

B. See A.

C. Fresh out of dummies.

D. There is. It's called capitulation.

E. Because the person who thinks it's random doesn't understand it.

F. Can't say. What does that have to do with "randomness"?

LC
 
Hmmm.....very interesting question traderNik. Yes, I would agree that human behavior is very predictible at times. In fact, as I've mentioned before, I'm looking for washout volume at bottoms so in that sense I'm trying to predict human behavior but it doesn't always happen that way. I've seen bottoms occur on light volume.

Here's the rub....traders/investors will debate this issue til the cows come home. If you view the market as being technical and you make money OR you view it as random and you make money then there's really nothing to debate. The only thing that matters is making money.


Quote from traderNik:

Question for you, PTF.

Do you believe that human group behaviour is predictable or unpredictable? I won't bother with examples, I think it's pretty obvious that there are recurring situations in which the decisions of humans in groups could be statistically analyzed to see if they were random or not.
More...
 
I tend to agree. Markets are randomly deterministic that can be resolved only by some statistically heuristic forecasting models, such as JH's ones.

Quote from hypostomus:

PTF, you are a CFI. Markets are totally deterministic. But that determinism is so complex that it sometimes appears to be random. If you had the brains and eyes to watch an index intraday, you would recognize that it is anything but random. Deep pockets limit order traders who MAKE the markets, should they deign to hang around here and read your crap, would laugh so hard they'd shit like geese.
More...
 
You must log in or register to reply here.
Back
Top