The market is so logical

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

  1. opm8


    How do cards in a deck relate to the market? You know precisely how many cards are in a deck as well as precisely which ones there are but not their order. Whereas in the market you could say we have an infinite number of cards and we also don't know what they are.

    I think we are in agreement except for our terminology. I believe that the market will sometimes do what we expect but we never know for how long it will last, how often the event will happen, or when the next occurrence of "successful trade outcome" will take place. Purely random.

    #11     Jun 1, 2007
  2. Its the purely that I have an issue with - that implies a very high degree of uncertainty.

    You can know the probability that it will move a certain amount and, over a long enough series, how often the event is going to happen.

    I have trades that work more than 80% of the time (defining work as reaching the target before they retrace as far as the stop). There is a randomness about these trades but there is nothing "purely" random about them. They are more like a defined move with random noise added to it (sometimes the noise overwhelms the move).

    "hazarded without previous calculation; left to chance; haphazard;"
    #12     Jun 1, 2007
  3. opm8


    ok, but you still don't know when the next time you'll see one of your "80% of the time profitable" trades is coming, right? That's the random part. You have to monitor conditions and wait for the signal -- you have no idea when that signal is going to come. As well, you don't know the outcome of the next trade, that is random too. Sure you have probability based on history but the future is unknown, like a coin toss. You know it's 50/50 heads or tails but which is coming next? The outcome is always random but you create your own environment to encapsulate what is happening and give it a name. If a setup fits the parameters you take the trade, but the outcome is a random distribution.

    #13     Jun 1, 2007
  4. Yes, now our language is closer to meaning the same things. One clarification: although I don't know exactly when one of trade XX is coming along I do know that I will almost certainly see at least 2 of them each day. So I have quite a lot of foreknowledge ... just not certainty.

    The other good thing is that days that don't give 2 or more trade XXs usually give a large number of trade YYs because they're trend days. Life is a box of chocolates .... darn it .... so is the market.

    Perhaps I need to change my nick to forest_kiwi or kiwi_anna :)
    #14     Jun 1, 2007
  5. opm8


    We finally agree. The thread can now be closed. :p

    #15     Jun 1, 2007
  6. ammo


    there is nothing random about drawing lines on charts and watching the spu cash stop at 1540 yesterday,that's your 80% trade
    #16     Jun 2, 2007
  7. opm8


    Yes, because if anything the markets respond to, it's the lines you draw on your screen.

    #17     Jun 2, 2007


    Lines on the screen are the tea leaves of the ignorant.
    #18     Jun 2, 2007
  9. don't be fooled

    the market is fuzzy logic at best
    #19     Jun 2, 2007
  10. Pr0crast

    Pr0crast Guest

    You would be surprised :D
    #20     Jun 2, 2007