come on

Discussion in 'Trading' started by weld1, Nov 4, 2009.

  1. Coming from you Prof, that's very funny ... in fact, it's absolutely hystericall!!! :D

    This isn't exactly true, although those to whom fate has been kinder tend to think so.

    C-Kid/etc. is much closer to having a good understanding of how things work than his frivolous personalities would lead anyone to believe.
    ***
    Having said that, I will go on to say that the market is not ramdon:

    1. The market is not random.

    2. It moves through two different states:
    a) strongly trending action/range expansion/increase in volatility
    b) consoliation action/range compression/decrease in volatility

    3. During these states, the market performs in a way where it will generate a specific result which is greater than the binominal probability of a 50/50 coin toss.
    (example: when the market is in an uptrend, and price is trending strongly, there is a greater than 50% chance that taking a long trade will yield a profitable result).

    4. Therefore, strategies can be designed to take advantage of (and profit from) either of these two states.

    4. Even when you have devised a method to capitalize on any given market and the state (trending or consolidation) that your method capitalizes on, your potential for success will always be greater than 50% and less than 100%. Therefore, you will never have an absolutely 100% success rate.

    So, by my definition c-kid/etc., the market is not random, because you can achieve a result which is better than what a completely radom, binominally distributed, coin toss would produce.

    Note to Ivan: Despite the nonsense, I do enjoy these conversations, as we are able to discuss these trading concepts at a relatively high level, considering the fact that we makeup the market of retail traders, which is a pretty select (and small) group of people, as it is.
     
    #51     Nov 10, 2009