Randomness And Trading

Discussion in 'Trading' started by Tall Mike, Jul 18, 2020.

  1. themickey

    themickey

    I like to consider randomness as a component of trading this way....
    Take ANY market instrument on ANY time frame and take ANY method you like to compute, does anyone or anything know where the next bar will fall?
    We already know the answer to this.
    And then claim there is no randomness. Truly bizzare thinking from so called intelligent people. Mind boggling.
     
    #71     Jul 20, 2020
  2. userque

    userque

    Not sure exactly what your assertion is. Are saying that since we don't know where the next bar is, it must be random.

    If so, not being able to predict something is not necessarily evidence that it is random. The predictor may simply not have all of the necessary data/factors with which to make proper predictions.

    A coin flip is physics, not randomness. But since most don't know all the factors/data involved in the trajectory of the coin from the hand to the floor, and since the outcome is very sensitive to those factors, it is regarded as random, for practical purposes.
     
    #72     Jul 20, 2020
  3. Specterx

    Specterx

    Most aspiring traders gravitate towards trying to predict movements in index futures on 1min-5min bar intervals. That's pretty darned random.

    Start talking about fundamentally or reflexivity-driven driven trends playing over weeks or months, and it's definitely not random. US growth / mega-cap tech right now, bonds from Dec 2019-Mar 2020, GBP/USD last year, gold over the last 18 months....
     
    #73     Jul 20, 2020
  4. Poljot

    Poljot

    In my opinion short term price action is random and is a result of non-random decisions by market participants. Price fluctuates around the economic value of an asset.
    In the long term price action is non-random and converges to the economic value determined by fundamentals.
     
    #74     Jul 20, 2020
  5. TallMike:

    I saw the title of the post and I knew it came from you.

    What "gurus" are you talking about? I assume Tom from TastyTrade is one of them?



     
    Last edited: Jul 20, 2020
    #75     Jul 20, 2020
    Tall Mike likes this.
  6. tiddlywinks

    tiddlywinks

    Sequence does not contain number seven (7). Could be a keyboard problem. :rolleyes:

    Half of the middle sequences begin with a 9, the other half begins with a 6.

    Gamblers fallacy perhaps. But the odds of "predicting" the next number have favorably increased 33%.
     
    Last edited: Jul 20, 2020
    #76     Jul 20, 2020
  7. Tradex

    Tradex

    All the "fundamentals" are already on the charts, so we do NOT need them for trading purposes, total waste of time and energy.

    If fundamentals had ANY predictive value, economists would all be Billionaires by now.

    At best, fundamentals can predict the past.
     
    #77     Jul 20, 2020
    comagnum likes this.
  8. userque

    userque

    This is an interesting concept I've pondered over the years.

    Essentially, everything that is known (including forecasts, outlooks, and expectations) is baked into the chart.

    So, this in effect, says, that the only input you need, in order to forecast price, is the price data.?
     
    #78     Jul 20, 2020
    Tradex likes this.
  9. tiddlywinks

    tiddlywinks

    Sentiment.
     
    #79     Jul 20, 2020
    userque likes this.
  10. Tradex

    Tradex

    Absolutely, a chart contains everything we need to know about the market.

    It is even more powerful when we also display the volume, another important (and often overlooked) element, especially for breakout systems.

    The rest is just conversation.
     
    #80     Jul 20, 2020
    userque likes this.