when i see some idiot buying/selling an ETF far above/below it's NAV pre or post market and i short/buy that fool then that is not a random trade. when i see the same after hours program runs that puts a stack of bids or offers up/down to the level one bid/offer and i take those shares then that is not a random trade. waiting for a massive seller to quit pushing down a stock by himself (aka AMR a few days ago). buying/selling a stock that has a big imbalance (AMEXs especially) and trying to catch the print up on the close is not random. MWA.B and GRC from friday are examples. watch the imbalances today. you will see some pretty non-random stuff there. when you trade order flow things get a lot less random.
it's the exact opposite. if the market were 100% random (ie, it followed a perfect normal distribution), then it'd be easy to profit because you now have a clear and perfect statistical model to describe the market behavior and that model would never fail. but the market is occasionally not random and hence these models eventually fail, sometimes spectacularly.
Generate a random chart with more than 100000 bars and you wont find a systematic or discretionary way that makes money. Its not possible. Only nonrandom movement can be exploited. Marketmaking is something else and works best in a highly random market bc as you said it is and stays predictably random. Thats why there are so many forex bucketshops making market for their "customers".
Disclaimer: newbie at this --- about 2 months into the research and up about 2800 bucks for the month of december. no open positions at the moment observation today appears to be a day where the charts on ym appear to me (newbie) as mostly noise my observation is --- there is quite possibly a difference between saying: all market behavior is 'random' & much (most?) chart activity is 'noise' --- witness today so far but some is not 'noise' and those appear to be the opportunites most people are trying to exploit to make money just my 2 cents (worth about a penny and half as a newbie)
The futures markets are made up of 1000´s strikes containing millions of contracts on the bid and ask. The reasons for these strikes is unavailable. Some are hedges off the cash markets. Some are taken from signals off EOD charts, 4 hour, 1 hour , 30 minute charts etc etc. And some are exits to flat whilst others are entries. Some strikes are for one contract while some represent 1,000+ We do know that each strike lands on a price point. We just do not know what the underlying plan of each strike is. "are markets truly random?" regards f9
For a thorough discussion of this topic, see "Trading in the Zone" by Mark Douglas. After I read it, my eyes were opened as to the true nature of the markets and what it takes to make it as a successful trader.
Had the opposite effect for me...couldn't keep my eyes open. Most over-hyped trading book around imo.