Why do I see "Trends" in Randomly Generated Data?

Quote from marketsurfer:

your trading skill/luck is not the issue here. i have no reason not to believe your success, you have been very consistent and direct over a non trivial amount of time.

with that said, i'll return to the issue at hand. What I take as a given, apparently, is not understood, so I will attempt to explain--- this human psych being predictable therefore TA works since human psyche is reflected in price, which is illustrated by TA. right?

It's time to knock down this myth---- the first and most obvious reason the above makes no sense is--- the market is NOT driven by the masses, the masses are BUY AND HOLD only--the masses are NOT traders---nor DECISION makers---

the market is driven primarily by large sums of capital controlled by a relatively few people/teams who are constantly trying to GAME the system to create edge--- no one knows what these guys are thinking or why they are thinking it---however, the desire to game the system circumvents any hope of edge created by TA.

hope this makes sense.

surf
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I absolutely agree with you for the first part!!!
Damn that is scary.

For the last part, I'll clarify saying that I feel that NORMAL/AVERAGE TA is limited in its ability to offer the average trader ANY edge whatsoever.
 
Quote from MAESTRO:

An interesting statement. What you are saying is that your understanding of markets, electricity and gravity is the only one that makes sense...
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Actually, I don't think that this is at all what Spydertrader is saying. It is what marketsurfer is always saying.
 
Quote from Thunderdog:

Actually, I don't think that this is at all what Spydertrader is saying. It is what marketsurfer is always saying. And, although I am no fan of Jack, I call them as I see them.
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So, would it be safe to say that there is a possibility that markets following (like gravity or electricity) some objective laws that do not depend on how traders play it?
 
Quote from MAESTRO:

What you are saying is that your understanding of markets, electricity and gravity is the only one that makes sense.
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I said no such thing.

In fact, a myriad of ways exist to profit from the markets. Some methods I fully comprehend, while others I lack the knowledge and skills to execute. However, becuase I don't know how to trade options doesn't mean you can't profit from your knowledge, skills and abilities. Just as your inability to 'see' a trend has no bearing on my knowledge, skills, experience or profits.

marketsurfer, on the other hand, cannot trade for a living. How again is one, who cannot trade any method successfully qualified to form opinions on what other traders can and cannot do?

This isn't a cut on surf. He's a friendly and generous individual. However, my point is this, simply becuase you cannot see something, doesn't mean that something doesn't exist.

You cannot 'see' trends now, just as scientists once believed the earth to be flat. Some people still believe the earth is flat becuase they cannot 'see' it otherwise. If you cannot 'see' the market as I do, no problem. Such a viewpoint does not preclude you from making profits. However, your 'belief' system also fails to influence my profits.

Many ways to skin a cat.

- Spydertrader
 
Quote from ProfLogic:

Great comment! I hope you believe it as well.
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Of course I do! I doubt my self regularly! :D It does not preclude me though from expressing my point of view.
 
Quote from Spydertrader:

I said no such thing.

In fact, a myriad of ways exist to profit from the markets. Some methods I fully comprehend, while others I lack the knowledge and skills to execute. However, becuase I don't know how to trade options doesn't mean you can't profit from your knowledge, skills and abilities. Just as your inability to 'see' a trend has no bearing on my knowledge, skills, experience or profits.

marketsurfer, on the other hand, cannot trade for a living. How again is one, who cannot trade any method successfully qualified to form opinions on what other traders can and cannot do?

This isn't a cut on surf. He's a friendly and generous individual. However, my point is this, simply becuase you cannot see something, doesn't mean that something doesn't exist.

You cannot 'see' trends now, just as scientists once believed the earth to be flat. Some people still believe the earth is flat becuase they cannot 'see' it otherwise. If you cannot 'see' the market as I do, no problem. Such a viewpoint does not preclude you from making profits. However, your 'belief' system also fails to influence my profits.

Many ways to skin a cat.


- Spydertrader
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I think I understand you better now.
 
Quote from MAESTRO:

So, would it be safe to say that there is a possibility that markets following (like gravity or electricity) some objective laws that do not depend on how traders play it?
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Actually, I would be disinclined to compare the movement of markets with the laws of gravity or electricity. As I have noted repeatedly in other threads and, no doubt, as many people would agree, the study of price movement is perhaps better described as a "social science" rather than a pure, hard science such as physics. In fact, I would think that the market moves exactly in relation to how traders (in the aggregate) play it.
 
Quote from Thunderdog:

Actually, I would be disinclined to compare the movement of markets with the laws of gravity or electricity. As I have noted repeatedly in other threads and, no doubt, as many people would agree, the study of price movement is perhaps better described as a "social science" rather than a pure, hard science such as physics. In fact, I would think that the market moves exactly in relation to how traders (in the aggregate) play it.
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I am glad that you clarified it. I believe in exact opposite. I believe that like gas dynamics could be studied objectively without describing how each of the molecules move the markets could be studied prosperously from the stand point of view of insignificance of what traders are doing. This is the approach that I subscribe to and that is why I participated in this discussion in the first place. I don't believe that it matters what each trader (molecule) is doing. I believe that their common behavior can be modeled fairly precisely.
 
Quote from MAESTRO:

...I don't believe that it matters what each trader (molecule) is doing. I believe that their common behavior can be modeled fairly precisely.
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There is no disagreement here regarding the individual versus the aggregate. However, for my own purposes, I am inclined to replace "fairly precisely" with "reasonably." Since I continue to hold the view that the study of the markets is better described as a social science rather than a pure science because of the human behavior element (either individually or in the aggregate), I am disinclined to attribute very much precision to its study.
 
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