Random Market PROOF

Discussion in 'Technical Analysis' started by ProfitTakgFool, Jan 1, 2008.

  1. JSSPMK

    JSSPMK

    Don't waste your time mate :)
     
    #21     Jan 2, 2008
  2. 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.
     
    #22     Jan 2, 2008
  3. JSSPMK

    JSSPMK

    #23     Jan 2, 2008
  4. gwb-trading

    gwb-trading

    Nobody has even brought up the point that the "seeded" random generator used in most computer programs is not really "random". The underlying concept that the generated sequence is random is very much in doubt, which leads to the skewed "bell curve" and other inconsistencies.

    - Greg B.

    P.S. Are six-sigma events random? Can they not be seen as clearly obvious events on charts?
     
    #24     Jan 2, 2008
  5. this experiment is so poorly thought out it proves nothing. what makes you think the stock market only moves -1, 0 or +1 per day? theoretically it can move -100% to +N% per day if you assume daily movements are truly random and normally distributed (which they are not).

    change your experiment to increase/decrease previous values by a random % from 0.0001 to (say) 100% and you'll see it looks nothing like the market. even if you assume a range like [-30%, +30%] you'll see it doesn't resemble the market.

    i say it again, daily price movement is not random.
     
    #25     Jan 2, 2008
  6. gwb-trading

    gwb-trading

    and note the second test of resistance at 1505/1506 and the second test of support at 1498/1499. Prices tend to revert to a mean, even in a randomly generated sequence.

    Therefore as the random sequence hits an extreme based on the generated formula, it is likely to change direction. I expect that the probability of generating twelve +1 "random rolls" in row is a lot less than generating a +1, -1 sequence..... as I perform a random walk.
     
    #26     Jan 2, 2008
  7. JSSPMK

    JSSPMK

    Events that are influenced by manipulative nature can not be random, though may appear to be.
     
    #27     Jan 2, 2008
  8. i believe the rand() function in excel creates normally distributed values, or as good as you can get with software. it does so by selecting numbers from a pool of pre-generated, random numbers. other software-based random number generators use an algorithm with a hardware seed value, and the result may not be normally distributed. the ones that come with programming libraries typically do this.

    rand() should be valid for our purposes.
     
    #28     Jan 2, 2008
  9. Are you sure about that? Look at SLM...the short term "random" price action is easily explainable by the massive bids.
     
    #29     Jan 2, 2008
  10. Thank god I dont understand any of this.

    regards
    f9
     
    #30     Jan 2, 2008