This discussion, although interesting, seems to have devolved a bit, with each side just stating the same points over and over again. In other words, the random walkers simply refuse to accept the multiple proofs that have been placed before them. They can't admit that it's about probabilities and that market action can be predicted within this framework. The funny thing is, the people who think the markets are random can still come up with disclaimers like the one above about the corn market, which is the only argument that most of us non-random- walkers are making. (Not saying that Perseus is a random walker - I don't know if he is or isn't). Also, there hasn't been much discussion about predicting market movements using funnymentals. I am sure the random walkers will claim that Warren and other value investors are just lucky to have happened to pick the stocks that would go up over the years. btw... I found it funny that Heisenberg has been cited by both sides as evidence that their position is correct. Occasional anomalous events do not prove that ordered systems are disordered.
Well there are trends, up and down, sure, but I don't follow trends. And of course they are better identified in hindsight. Trend is a diversion but it does a very valuable job in being the fixation of other traders and apparently the rest of the world. Now patterns, here I disagree. The trick is in establishing a predictive model. So I welcome the belief elsewhere that patterns, or gyrations as I call it, have no predictive potential.
All of you that think the market is random, why are trading? You just like gambling? Is there a sure method of making money through gambling? Even card counters rely on probabilities. I'm just confused, not ironic, not sarcastic
I am surprised you think that everyone thinks the market is random. I know that data/parameters can be marshalled into a framework to predict the markets gyrations (eg DOW). Others would know, even if they don't know how to measure and exploit the market's predictive potential. Establishing a predictive trading model is apparently not something independent traders do or want to do.
Randomsurfers-walker-whatever are trading because their belief is that the money and risk management (the only thing that is controllable) alone will do the trick to make money. (sorry, but a negative expectancy with the best money management strategy in the world wouldn't help... or actually even a zero expectancy - which is what the market is if it's completely random - might not help much.) So if you are a randomwalker, zero is the expectancy that you are having when you trade and eventually you will lose money long term, especially if you think each trade is independent, so there is no point for them to trade at all. But now, if they say that they are using money management because they are betting on that anytime a market will definitely trend, this statement in a way contradicts their randomwalk belief, because if you believe a market is random, then how would you know that it will definitely trend. If it's truly random, it might not even trend in 150 years.. longer that you live..so you will lose all your money anyways.. so again, no point to trade. I mean you already mentioned that trend is a hindsight. So conclusion - randomwalkers don't really trade; they just like to state their belief either because they can't figure it out yet or just for ego reason..just like some academic absentminded phds. Basically a market is an open nonlinear system as everyone here should know ..and this falls into the category of chaos theoretical science. No one is still able to figure this science out..so unless this forum is for just purely for sharing ideas...then there is no point to argue and prove who is right. If I recall correctly, there is one thing that chaos theory states and that is that both order and randomness can coexist in a system and also short term "predicting" of an event is easier than long term "predicting" of an event and thus this allows one to be able to make a probability call of an event in a nearer term. Sorta like almost predicting a hurricane path.. noticed that the hurricane probable route on a weather map is always narrower near the actual hurricane and widens as it gets further away from the point of the actual hurricane. Shows that it's easier to to "predict" in a shorter time length, than a longer time length from the actual point of reference.
Who do you think is doing the tossing? Studies actually show 51% of tosses land on the side that was facing up when thrown And the old saying "tails never fails" is actually true if you spin the coin on its side instead of throwing it up, it will land on tails 80% of the time.... there is more weight on the heads side
Not a joke: When the Japanese invented the automatic cameras they called them PHD Cameras. PHD stands for "push here dummy".
I say that the market is very predictable under certain conditons. At violent tops and bottoms the behavior is the same. Markets are not random. They can not be random because it is a living system. Each action taken is from a human being or his machines on purpose and for a reason. These charts just project the prices and combine them various time formats. It looks random on paper but each price was put there on puprose by a person. This chart protrays the actions of the crowd but the chart is not the crowd. John
Where did I talk about randomness anywhere.I was pointing out the apparent ineptitude of Niederhoffers Article. Fooled by Cognitive Dissonance