The market is so logical

Discussion in 'Trading' started by dozu888, Jun 1, 2007.

  1. dozu888


    and the logic can be summarized as such:

    If it cannot / does not do A, then it must do B.
  2. Unfortunately, B often has several mutations and there's always the clause, if B is not an option, proceed to C.:p
  3. dozu888


    quite true.... but all we are looking for is

    successful (B + C + ...) > failed (B + C + ...)

    aren't we :)
  4. was that a joke?
  5. Rahula


    There is a logic underlying the market but it is an emotional logic programed in the old reptilian part of our brains. Crowd behavior, safety in numbers. Crowd psychology. A school of fish move in unison - who moves first?
    And don't forget hindsight bias, markets are perfectly understandable in hindsight but in real-time no one has a clue as to what comes next.
  6. opm8


    This is typical bullshit fed to newbs. Old reptilian brain? Please. The only logic in the market resides in your own mind. Every action in the market is taken because someone thinks it's logical. That includes the trading programs, made by humans, to take logical trades.

    Taken as a whole, the markets are purely random. That there is some reference to psychology in them is delusional thinking.

  7. Not purely random, because clearly, Gaussian statistics doesn't accurately model the behavior of financial instruments entirely. But impirically, we know that sometimes the markets are more random than other times. So much so, that it can be maddening to try and consistently take money out of the market through trading.
  8. Taken in the specific the markets can be anything but random. Many of us rely on this - just as one could rely on the cards in a blackjack deck.
  9. opm8


    What in the world are you talking about? Gaussian statistics and "impirically (sic), we know that sometimes the markets are more random than other times." Huh? How do "we" know this?

    The only consistency to the market is that sometimes a move lasts for a while before turning. That's it.

    #10     Jun 1, 2007