Are currency markets random?

[tommyfx]

HI cyberwave,

Glad you agree with what i said, i close positions at the end of each day, this is just to reduce risk of any asian action overnight getting me stopped out, if you trade correctly and with realistic intraday targets you are in most trades for a maximum of a couple of hours so there isn't really any need to have positions over night, i usually have a trade open for 30-45 mins.

[cyberwave]

Originally Posted by tommyfx

HI cyberwave,

Glad you agree with what i said, i close positions at the end of each day, this is just to reduce risk of any asian action overnight getting me stopped out, if you trade correctly and with realistic intraday targets you are in most trades for a maximum of a couple of hours so there isn't really any need to have positions over night, i usually have a trade open for 30-45 mins.

hi Tom,..

Thanks for the fast reply,..i actually do a very similar thing,my system is a typical MA cross over system that works like a charm most of the time..sometimes though i stay in a trade for 2 or 3 hours to reach my target depending on the way i enter,..i certainly would prefer to stay only for 30 minutes,.. however to be honest if i entered the same trades during the european and american sessions,..we'd have the same outtcome and i'd only stay for 30 minutes which is much more safer,..but due to my time management of the day i alwasy end up trading the asian session,..i found it to be more predictable and goes in one direction but it takes more time to get you there...

[BullMarket]

Originally Posted by TraderABC

see this pic as well.

Euro is moving like it should. there is noise but, it's not random.

Aslo I'd like to see the algorithm you use to produce your charts and how do you produce them. Did you wright a program to do it if so I'd like to see the code to do my own charts.

Also on the Euro look how it now range bound between the even numbers.
Crazy of us humas like round numbers.

-Frank

[BullMarket]

Originally Posted by TraderABC

Some events on the charts MAY be due to your broker affecting the price which is random. For example during the news your broker may use the occasion to whipsaw price up and down thus setting off orders and stop lossess, AND make market look like it is predictable and ran by real people.


Could you please explain?



Again I can provide 10000s of randomly generated charts, the facts take from mathematical statistics are:

Randomly generated graphs can have:
Trends
Flats
Triangles
Elliot Waves
Channels (rising tops and rising bottoms and vice versa)
Double tops/bottoms
Fibonacci retracements and everything else.


I hope the price in forex is not random...

Below is a pic of Euro 5 min chart early jan 2003... Look at all the tails... Below Euro pic are randomly generated candles. Also have you seen my pic of randomly generated closes that was almost IDENTICAL to euro rise up to 1.36 in Later 04 early 05 and fall (if I find it I should link it here)?

Volume is less during consolidation. aslo plays an important part in finding paterns.

Randomly generated graphs can have:
Trends
Flats
Triangles
Elliot Waves
Channels (rising tops and rising bottoms and vice versa)
Double tops/bottoms
Fibonacci retracements and everything else.

Prove it.

-Frank

[TraderABC]

Bullmarket, could you please explain what are those levels that you attached to my chart?

About random number generator. I used excell and random function. Random start value + random increment (+ or -) for line chart. For candle chart the algorith was random start value + random increment to get the close, + random high and random low value.

To build a chart you could even use toin cossess (lots of them)... Even using state of the art random number generator program does not show different graphs.

[TraderABC]

Here I even put SMA 6/12... Look how it works, same as in Forex.

[awcapital]

It does not matter whether one thinks the market is random or not. Rule no 1, forex market can do anything. The way to make money is in your risk management. Unlike gambling where on the even odds your wins is 1:1 and losses are also 1:1, with trading you let your profit runs and control losses using stops.

In the simplest case where the market is a random walk and that the ratio of winning and losing is 50:50 you can still make money if you limit losses and let profit runs. One cannot control let alone predict the market. The only variable one can control is YOURSELF.

Many traders failed because they don't follow their system. Its all in the mind. Just remember statistically you can still make money even if the win loss of your system is 20:80. As long as you have good risk management strategy.

So, STOP looking for the holy grail system. Keep it simple. Indicators are only there to help you. They are not going to predict the market. If only ppl spend more time on risk management and less on "curve fitting" with indicators.

My 2 cents

[TraderABC]

Originally Posted by awcapital

It does not matter whether one thinks the market is random or not.

It does matter if market is random or not. The more random it is the less importance should be given to a system and more to MM ... Obviously if market is random than a person should not spend any time looking at charts or reading fundamental analysis (but theory of probabilities would be a good one).

Rule no 1, forex market can do anything. The way to make money is in your risk management. Unlike gambling where on the even odds your wins is 1:1 and losses are also 1:1, with trading you let your profit runs and control losses using stops.

In the simplest case where the market is a random walk and that the ratio of winning and losing is 50:50 you can still make money if you limit losses and let profit runs. One cannot control let alone predict the market. The only variable one can control is YOURSELF.

Many traders failed because they don't follow their system. Its all in the mind. Just remember statistically you can still make money even if the win loss of your system is 20:80. As long as you have good risk management strategy.

So, STOP looking for the holy grail system. Keep it simple. Indicators are only there to help you. They are not going to predict the market. If only ppl spend more time on risk management and less on "curve fitting" with indicators.

My 2 cents

I agree 100%.