Ah, you do realise that his whole hypothesis was based on a trial from a randomly generated chart interpreted by one person, which you think qualifies as an empirical study defining the essence of the markets. Malkiel obviously didn't, but don't you see how incredibly preposterous this hypothesis is?
If the markets are not random, how can they exist? What prevents them from being "cornered" or exploited out of existence?
Surf, I'm sorry but sometimes you really walk into it. The market has an endless supply of participants with your talent for trading. That provides the snacks for the banks and hedge funds. There is more than one bank and more than one hedge fund. It's a zero sum game. Not all can win, so sometimes you eat the other guys lunch, sometimes he eats yours. The astute retail trader seeks to exploit the moves resultant from big players taking or liquidating a position.
Quote: I have never found a movement in prices that anyone could make money with by a trend following method that didn’t also show a major departure from randomness revealed by the standard statistical measures I mentioned. End. Meaning, 1) he has found price movements that could be exploited by trend following methods 2) said movements showed a major departure from randomness 3) such was proven by his application of standard statistical measures. Have I missed anything?
Markets are not random, they are chaotic. Lorenz put it as "When the present determines the future, but the approximate present does not approximately determine the future." No one has perfect information, therefore the market is observed as chaotic by everyone.
First it's a negative sum game due to fees and costs of participation. Second, the fact that the variety of participants interpret information differently creates randomness. It can't do anything else. Third, its ok not to agree with me, im totally cool with and expect it. Why folks get so bent out of shape, i never understood. surf
You've come to the point where you are arguing for the sake of arguing and that is really a waste of time. Your mentor has identified trends, accepts that this is non-random in nature, and has satisfied himself that this is so by his use of statistics. It is quite clear. All you can say in rebuttal is I don't understand. It's the same with every fanatic, when they run out of things to justify their position, they say you don't understand. I'm done with this.