Random or Competition?

[kimo'sabby]

I trade futures, specifically the, ES. Now, i'm obviously a staunch believer in AMT, and cause/effect.

Here's what really ruins my day: Some idiot telling me that the market is random!

Obviously, i'm gonna come running to you guys 🙂)which may be the worst action i could take) nevertheless, i'm here, and you can kick the living **** out of me if need be (rhetorically of course).

My point: If i lose money in the market, is it a random affair, or, is it because my competition excelled within the game?

 

[robster970]

The arrival of orders is random.

The aggregate bias of buyers vs sellers wrt available liquidity is directional.

I'm with you - if you have a good market understanding, there is no reason why you shouldn't be able to win 100% of the time. All traders are striving to improve their market understanding and competition amongst us ensure we never get that perfect hit rate.

Simples!

 

[kimo'sabby]

The arrival of orders is random.

The aggregate bias of buyers vs sellers wrt available liquidity is directional.

I'm with you - if you have a good market understanding, there is no reason why you shouldn't be able to win 100% of the time. All traders are striving to improve their market understanding and competition amongst us ensure we never get that perfect hit rate.

Simples!

Rob. 100%? There's no need to be like that, i'm not being facetious or condescending, i'm trying to make a valid point.

Where is the proof that the market is random?

There is proof that the market is competitive (nobody wins all the time)

 

[robster970]

Rob. 100%? There's no need to be like that, i'm not being facetious or condescending, i'm trying to make a valid point.

Where is the proof that the market is random?

There is proof that the market is competitive (nobody wins all the time)

I'm serious man - I reckon that if you are skilled enough and have the right mental attitude, you can trade well enough to get very close to 100%.

I'm happy flopping around between about 50% and 85% on a hot streak but aspirationally I think 90%+ with consistency is entirely possible.

 

[kimo'sabby]

I'm serious man - I reckon that if you are skilled enough and have the right mental attitude, you can trade well enough to get very close to 100%.

I'm happy flopping around between about 50% and 85% on a hot streak but aspirationally I think 90%+ with consistency is entirely possible.

You keep this thread exactly the way you want it, Rob. My obvious offense was that of trying to add some dimension.

 

[Liquid validity]

Where is the proof that the market is random?

There is proof that the market is competitive (nobody wins all the time)

There is no proof, because markets are not random.
They can be sometimes, for sure.

Even at the most basic level - open and close time is fixed,
so there is a basic example of none random market behaviour.
If markets were truly random, peak volume and trends would
occur outside RTH, they don't.

A simple exercise of buying support and selling resistance will demonstrate
psychological price barriers in play.
Individual trade outcome may be random, but the long term result is not a random walk.

The notion of random markets, random trade outcome and random entry
are frequently and mistakenly intertwined as if they are all in some way related.
They aren't.
In fact I'd go as far to say that random entry (or semi random in truth) only works
because of the none random and rigid elements of market structure I mentioned earlier.

Not that there is any great mystery, its a good base for automation or for learning.
With a bit of experience, you'd need your head testing to trade it discretionary.
Its not an efficiency based choice, its purely a preferential choice with
the acceptance of lower efficiency.

 

[counter_violent]

I trade futures, specifically the, ES. Now, i'm obviously a staunch believer in AMT, and cause/effect.

Here's what really ruins my day: Some f*ckin idiot telling me that the market is random!

Obviously, i'm gonna come running to you guys 🙂)which may be the worst action i could take) nevertheless, i'm here, and you can kick the living **** out of me if need be (rhetorically of course).

My point: If i lose money in the market, is it a random affair, or, is it because my competition excelled within the game?

The goal of any serious trader is surely to find a way of sorting out order from what can look like chaos.

So the answer to your point is....yes,because your competition excelled at the task.

 

[robster970]

You keep this thread exactly the way you want it, Rob. My obvious offense was that of trying to add some dimension.

Too serious today man. You're right, the market is entirely random, in fact it walks randomly by all account. I have proof and here it is:

 

[Liquid validity]

I'm serious man - I reckon that if you are skilled enough and have the right mental attitude, you can trade well enough to get very close to 100%.

I'm happy flopping around between about 50% and 85% on a hot streak but aspirationally I think 90%+ with consistency is entirely possible.

Surely that means that you would need to know the different
motivations, actions and intentions of every participant
capable of moving price - in advance.

Their motivations alone will differ wildly, as they are not all in it for a
few directional ticks for a start.

 

[tar]

Too serious today man. You're right, the market is entirely random, in fact it walks randomly by all account. I have proof and here it is:

Your evidence is flawed , you should divide by ( X-LOL )

 

[robster970]

Surely that means that you would need to know the different
motivations, actions and intentions of every participant
capable of moving price - in advance.

Their motivations alone will differ wildly, as they are not all in it for a
few directional ticks for a start.

I think very skilled traders can have a good stab at that, yes, primarily by understanding where in the food chain they are in relation to other participants and trading other participants limitations to their advantage.

 

[kimo'sabby]

There is no proof, because markets are not random.
They can be sometimes, for sure.

Even at the most basic level - open and close time is fixed,
so there is a basic example of none random market behaviour.
If markets were truly random, peak volume and trends would
occur outside RTH, they don't.

A simple exercise of buying support and selling resistance will demonstrate
psychological price barriers in play.
Individual trade outcome may be random, but the long term result is not a random walk.

The notion of random markets, random trade outcome and random entry
are frequently and mistakenly intertwined as if they are all in some way related.
They aren't.
In fact I'd go as far to say that random entry (or semi random in truth) only works
because of the none random and rigid elements of market structure I mentioned earlier.

Not that there is any great mystery, its a good base for automation or for learning.
With a bit of experience, you'd need your head testing to trade it discretionary.
Its not an efficiency based choice, its purely a preferential choice with
the acceptance of lower efficiency.

Haha. I've been on both sides, and it doesn't get any easier, which ever way you cut it.

 

[kimo'sabby]

An automative trader, is a successful trader. You can't automate if you can't trade.

 

[tar]

100% is impossible , you have an infinite number of variables involved here , win % alone is irrelevant anyway , one can make money with just 50% .

 

[tar]

An automative trader, is a successful trader. You can't automate if you can't trade.

Many automated systems fail at some point , so no not necessarily .

 

[Liquid validity]

100% is impossible , you have an infinite number of variables involved here , win % alone is irrelevant anyway , one can make money with just 50% .

I agree 🙂

 

[robster970]

100% is impossible , you have an infinite number of variables involved here , win % alone is irrelevant anyway , one can make money with just 50% .

My point is that if you are skilled enough, you can guage a suitable entry point so that if the move looks like it is going to fail, you can get out with a minimum of your commissions covered. It's the ability to not only pick your entries but also apply sh1t hot in trade mgmt and exit.

I agree that 100% is impossible but like I said, 90%+ without some ridiculous Spanish stops in play...........

 

[Liquid validity]

Many mechanical systems fail at some point , so no not necessarily .

Any form of trading and anyone can fail at some point.
We have proof of that on this very board:

http://www.trade2win.com/boards/trading-psychology/159720-dash-riprock-stops-trading.html
http://www.trade2win.com/boards/tra...ales-ramblings-other-stuff-full-timer-ex.html

It would be fair to say dash didn't necessarily fail, maybe burnout or
just got sick of it, he never actually said, not here anyway.

BTW, for clarity, I also agree with your quote.

 

[robster970]

Maybe I'm just deluding myself. Keeps me sane though.

 

[Liquid validity]

Maybe I'm just deluding myself. Keeps me sane though.

We all are really.
The only way you can guarantee future performance is looking back
in hindsight after quitting trading minted.

Until then we all tread a fine line, in the vain hope of reaching that goal.
Its a gamble - a calculated one maybe, but the outcome is not certain.
Then again most things in life are the same...

That sounds pessimistic, I'd prefer top call it realistic.