Fooled: The Role of Randomness

[wasp]

pics or it didn't happen! :cheesy:

 

[wasp]

It is interesting how it happens but, the markets aren't a random toin coss... they are people, buying and selling due to certain criteria and those that move the markets, do so with certain reasoning... which, as PodG would say, is screaming at you, blatantly obvious, regardless of the time frame.

 

[Joey25]

It is interesting how it happens but, the markets aren't a random toin coss... they are people, buying and selling due to certain criteria and those that move the markets, do so with certain reasoning... which, as PodG would say, is screaming at you, blatantly obvious, regardless of the time frame.

Sorry, I deleted the post before your reply.

 

[wasp]

The markets are like a page in a book... the candles, letters... to the very young, uninitiated, ignorant and average chav, they are just letters on a page that mean nothing... Once you learn to read though, they make perfect sense and tell a story...

 

[Joey25]

I like to fade supply / demand lines and areas of previous excess, where often the reversal occurs to the exact tick. So to write a piece about random walks seemed plain silly.

11 handles Friday fading S&P500 with an order put in at 7.00am

 

[Rossini]

Does it look random to you?

Erm no, quite the opposite...

 

[Pippy5000]

Its not the money. Never the money. Those who are in it for the money should look elsewhere. Its the challenge, the skill, a passion, a desire to conquer, understand and achieve. Trading is only partly about money.

OH NO, it's about the money!!! I tried to pay my mortgage once with passion and the desire to achieve and the heartless *******s at the bank told me they only accept USD.

Do you have kids man?? I play chess for an intellectual battle and baseball for a physical battle. See, when I lose at these activities my kids don't have to go to public school.

Sure I admit I get a thrill out of being right, but you're not supposed to. All the best traders are supposed to be emotionally neutral. So if you're using trading as a means to pat yourself on the back you will almost surely be using trading to kick yourself and to sometimes kick others. That is unless you are some kind of zen master who can feel the highs without feeling the lows. Personally I'm quite sure I'll never be emotionally neutral, but I don't seek the rush and certainly don't seek the depression.

Also, you don't think that we longer-term traders get the same feeling of superiority by studying daily charts and candles, reading the news, formulating an overall long-term plan and being right?? The same feeling of conquering/achievement is there and it's so much easier. You don't need to be chained to the computer to kick some counter-party ass and feel good about it!

 

[wasp]

OH NO, it's about the money!!! I tried to pay my mortgage once with passion and the desire to achieve and the heartless *******s at the bank told me they only accept USD.

Do you have kids man?? I play chess for an intellectual battle and baseball for a physical battle. See, when I lose at these activities my kids don't have to go to public school.

Sure I admit I get a thrill out of being right, but you're not supposed to. All the best traders are supposed to be emotionally neutral. So if you're using trading as a means to pat yourself on the back you will almost surely be using trading to kick yourself and to sometimes kick others. That is unless you are some kind of zen master who can feel the highs without feeling the lows. Personally I'm quite sure I'll never be emotionally neutral, but I don't seek the rush and certainly don't seek the depression.

Also, you don't think that we longer-term traders get the same feeling of superiority by studying daily charts and candles, reading the news, formulating an overall long-term plan and being right?? The same feeling of conquering/achievement is there and it's so much easier. You don't need to be chained to the computer to kick some counter-party ass and feel good about it!

If you can't consistently earn enough to pay the mortgage and send the kids to school, trading shouldn't be your sole income. If you are still too emotionally attached and not able to detach yourself, you aren't constant and solid enough to be relying on trading for an income.

When one puts money above the challenge, they will have problems detaching themselves. Take away the money issues and you will be a lot more at ease.

In order to be able to let passion and the challenge (not to be able to pat yourself on the back) be in charge, and get the pleasure of the skill and 'desire to be right' one has to be stable first. This isn't directed at you, but anyone thinking of trading as their income when too much is at risk/uncertain.

As for scalpers versus long term traders, it makes no difference... If you love something you'll put in as little or as many hours as you like. All I am saying is money is NOT the sole or major reason for trading, and if it is, then, your going to be sorely disappointed.

If one loves trading, spending 40 hours a week at a PC, in the comfort of your own home, with your family around you and the freedom to walk away when you please, then the hours spent at the screen are justified and certainly time better spent than earning money for someone else and taking a wage!

 

[Pippy5000]

Well the comment about the mortgage was a joke and I think you know that

I make a lot more from doing this than I made as a computer scientist, but would never be obnoxious enough to say how much that is in public.

If you are still too emotionally attached and not able to detach yourself, you aren't constant and solid enough to be relying on trading for an income.

Ha! The calm and cool trader who doesn't care about losing their capital? A myth..

This is how I make my living and I will stress out about this as much as I did at my job at NASA. It's natural and anyone who says they don't care about losing their capital is either insane or does not have kids.. So basically anyone who has children should not be a trader?? BAH!

You speak of trading as if it's a video game.. It isn't a game and those of us who rely on it for a living for our families aren't interested in the challenge.. I find the challenge an irritation on the road to providing a comfortable living for myself and my family..Like I said before, chess is more difficult intellectually than this and won't harm me if I lose...So that's my challenge right there, but really man if you enjoy the competitive nature of trading then more power to you. I personally would choose something a little less dangerous, but I think guys like you probably feed on that as well.

Anyway, good luck..

 

[wasp]

Cunning risk management means it would take me a year of consistent daily losses to lose less than 50% of my capital and if that happened, then I'd quit anyhow!

Each to their own and if it was an easy route to money, I'd be bored stupid. I have plenty of other challenges in my life but without the challenge and pleasure of trying to decipher the markets, I'd have to do something else. Of course, the money always helps!

Good trading...

 

[Pippy5000]

Well just for a change of pace you might try picking long-term supports that will hold to place your s/l behind.. Picking one perfectly is quite a challenge particularly with the chicken with its head cut off known as Cable.

 

[N Rothschild]

nothing happens randomly in the markets..if you think something is random you just don't understand why it happened

 

[Mr.J-Arthur]

Alright, let's get this straight. . .

Genics: You must understand why each tic is going up and down then? There is no possible way to understand every dip/pop/trend in the intraday movement (almost entirely random). Often times you hear the news say, "blah blah dow dropped 250 pts due to international struggles yada yada"....Do people REALLY sell based off of solid reasoning (technical or fundamental)? Rarely! I sell when my indicators tell me to...But my indicators are based off of other humans random decisions! It works! And I don't have to "understand" it, I merely see the opportunity in the chart, and trade it. The only doubts I have are people who are scalping the shortest timeframes. I mean, I could buy the market and sell it for a few ticks later just because I feel like the market is moving up...that would be a random transaction...

As a trader, you should know this: we do not need to understand a movement. We do not need to justify it, it's absurd to even try! We trade the movement and let the economists explain it in terms of unemployment, earnings, new housing sales, interest rates, rate cuts, bail out packages, political struggles, etc...

Nobody is arguing the market is 100% random. But we can also assume some humans might actually be choosing to make random trades. Why? Because we're talking about human emotions and opinions (desire to make profit or perhaps "gamble" or get even with the SPOUSE!).
And if size dictates the market on the short term, guess what? A random decision made by a large buyer/seller easily moves the market based off of their arbitrary feelings/emotions/data (if any!).

We can count on improbable events...we can count on the market to surprise us...
And seriously, if people actually "understood" the markets, why would they make such terrible decisions ?????? I think emotions control the market, which makes it prone to random movement.

As humans we always try to "attach" meaning to everything. Do we really know the meaning behind certain moves in the intraday-or do we just "Attach" a meaning to it ??? It is likely the second. The Dow does not rally because of specific reasons (sometimes maybe)....how many traders will jump onto a move without any "understanding" of the move? Thousands! Millions!

I know for myself...I could care less about understanding a last minute rally in the Dow...I just start BUYING! I see my technical resistance breaking out-I go ahead and buy! But why does it move...that is the debate 50% random 50% rationale (TA and/or Fundamental).

It's kind of like saying, Poker is never random. Poker is partially random. The cards you get are drawn out of random and delt to each player...the flop, the turn and the river are all random cards, but how do we profit? Our interpretation of our odds and the possible outcomes of this "random" game.

 

[wasp]

15 minute GBPJPY chart....

Screamingly, blatantly obvious... I could go larger or smaller TF and if you disagree... you just haven't spent enough time studying...

EDIT: more charts...

in order...

1st week Jan > 15min = Mon>Wed
1st week Jan > 15min = Wed>Fri
1st week Jan > 5min = Mon>Tue

 

[firewalker99]

Erm no, quite the opposite...

Exactly!

nothing happens randomly in the markets..if you think something is random you just don't understand why it happened

 

[alan5616]

15 minute GBPJPY chart....

Screamingly, blatantly obvious... I could go larger or smaller TF and if you disagree... you just haven't spent enough time studying...

EDIT: more charts...

in order...

1st week Jan > 15min = Mon>Wed
1st week Jan > 15min = Wed>Fri
1st week Jan > 5min = Mon>Tue

The charts tell the story. The 5 min tf is, also, produces some very good trades on this particular pair

 

[N Rothschild]

Alright, let's get this straight. . .

Genics: You must understand why each tic is going up and down then? There is no possible way to understand every dip/pop/trend in the intraday movement (almost entirely random). Often times you hear the news say, "blah blah dow dropped 250 pts due to international struggles yada yada"....Do people REALLY sell based off of solid reasoning (technical or fundamental)? Rarely! I sell when my indicators tell me to...But my indicators are based off of other humans random decisions! It works! And I don't have to "understand" it, I merely see the opportunity in the chart, and trade it. The only doubts I have are people who are scalping the shortest timeframes. I mean, I could buy the market and sell it for a few ticks later just because I feel like the market is moving up...that would be a random transaction...

As a trader, you should know this: we do not need to understand a movement. We do not need to justify it, it's absurd to even try! We trade the movement and let the economists explain it in terms of unemployment, earnings, new housing sales, interest rates, rate cuts, bail out packages, political struggles, etc...

Nobody is arguing the market is 100% random. But we can also assume some humans might actually be choosing to make random trades. Why? Because we're talking about human emotions and opinions (desire to make profit or perhaps "gamble" or get even with the SPOUSE!).
And if size dictates the market on the short term, guess what? A random decision made by a large buyer/seller easily moves the market based off of their arbitrary feelings/emotions/data (if any!).

We can count on improbable events...we can count on the market to surprise us...
And seriously, if people actually "understood" the markets, why would they make such terrible decisions ?????? I think emotions control the market, which makes it prone to random movement.

As humans we always try to "attach" meaning to everything. Do we really know the meaning behind certain moves in the intraday-or do we just "Attach" a meaning to it ??? It is likely the second. The Dow does not rally because of specific reasons (sometimes maybe)....how many traders will jump onto a move without any "understanding" of the move? Thousands! Millions!

I know for myself...I could care less about understanding a last minute rally in the Dow...I just start BUYING! I see my technical resistance breaking out-I go ahead and buy! But why does it move...that is the debate 50% random 50% rationale (TA and/or Fundamental).

It's kind of like saying, Poker is never random. Poker is partially random. The cards you get are drawn out of random and delt to each player...the flop, the turn and the river are all random cards, but how do we profit? Our interpretation of our odds and the possible outcomes of this "random" game.

your entire theory is based on the fact that human emotion is a random act..but is it?

 

[Rossini]

No, thats my, and many other peoples point!

 

[N Rothschild]

No, thats my, and many other peoples point!

sorry havnt read the thread just chiming in at the end

 

[wasp]

We retailers may be random and act in spite of the wife(!) but the pros don't......

Their actions are obvious and they move the market.