Does PAST price action determines future price action?

[Nonpiker]

i was in a foul mood

[bobnat]

Originally Posted by pipscooper

I would agree that averages are good at identifying PAST trend, however I don't agree that they are good at identifying either PRESENT or FUTURE trend, any better than random. I have done Monte Carlo testing against random trades and found this to be the case. It doesn't sound like you have tested your opinions. It is not that hard to test this with Monte Carlo simulation - it can be done in Excel on past data. Because of how relatively easy it is to statistivally prove that averages don't perform any better than random, there is really no reason not to take the time and do the tests yourself.

http://www.moneytec.com/forums/showt...452#post146452

LeBeau and Lucas, two highly respected and profitable traders, who have been in the business for a very long time, are prolific testers of all indicators. They have tested hundreds of thousands of MA set-ups over the last 15 years and their results have shown that not a single set-up did better than random. Their book on TA, btw, is one of the best out there, in case anyone is interested.

Nat

[bobnat]

Originally Posted by Nonpiker

nader,

Are you for real? Please do some equity research and decide if and think if an aquisition makes sense. Its people like you that makes me question why do I bother even posting on here. You and TraderABC should go out and have some beers. I have never heard more crap then your shit. You made me realize why do I even bother......this is my last post

Hey you Piker,

You and Gamma Jamma are two pearls in this cess pit. You're certainly one of my favorites and I deeply appreciate the perspective and experience you share. Ignore the morons, they are everywhere.

I think that one of the greatest pitfalls in trading is the need to be right. We see it here on these boards constantly. People with little knowledge and experience putting forth their views as if they were an expert. It's all an ego trip for them, whether they are conscious of it or not. One doesn't have to be an expert in much to trade, except for perhaps risk control and money management. When someone says that the market doesn't do what it should have done, run away from them, very fast. They're absolutely clueless, as the market always does what it does for its own reasons whether they're discernible or not.

Nat

[BullMarket]

Originally Posted by pipscooper

I would agree that averages are good at identifying PAST trend, however I don't agree that they are good at identifying either PRESENT or FUTURE trend, any better than random. I have done Monte Carlo testing against random trades and found this to be the case. It doesn't sound like you have tested your opinions. It is not that hard to test this with Monte Carlo simulation - it can be done in Excel on past data. Because of how relatively easy it is to statistivally prove that averages don't perform any better than random, there is really no reason not to take the time and do the tests yourself.

http://www.moneytec.com/forums/showt...452#post146452

Well, have no choice but to agree then in part. All the evidence I have of moving averages working is the success of Ed Seykota.

My theory is that moving averages would work in the appropriate set-up, or they at very lest help in to determined current price trend.

So I agree then in a mechanical set-up that moving averages produce random results.


-Frank

[narafa]

Originally Posted by Nonpiker

nader,

Are you for real? Please do some equity research and decide if and think if an aquisition makes sense. Its people like you that makes me question why do I bother even posting on here. You and TraderABC should go out and have some beers. I have never heard more crap then your shit. You made me realize why do I even bother......this is my last post

Well, thanks so much for the nice words. I always believed that it is a free world. I was debating, and not forcing a certain point of view. I even consider your post as a debate, but a very weak debate, as you attacked me rather than attacking my opinion and countering it, great post.

Thanks,

Nader

[narafa]

Originally Posted by bobnat

Hey you Piker,

You and Gamma Jamma are two pearls in this cess pit. You're certainly one of my favorites and I deeply appreciate the perspective and experience you share. Ignore the morons, they are everywhere.

I think that one of the greatest pitfalls in trading is the need to be right. We see it here on these boards constantly. People with little knowledge and experience putting forth their views as if they were an expert. It's all an ego trip for them, whether they are conscious of it or not. One doesn't have to be an expert in much to trade, except for perhaps risk control and money management. When someone says that the market doesn't do what it should have done, run away from them, very fast. They're absolutely clueless, as the market always does what it does for its own reasons whether they're discernible or not.

Nat

I don't claim to be an expert, as I said I was debating, and in any debate, logic always win.

I understand that the market always do what it want to do and that we have nothing to do about that. We all learn from the market, we all respect the market, and we all should follow the market.

Thanks,

Nader

[tommyfx]

"Another fact, is that nobody will place a 1 billion buy order as a single block, he will probably break it down to small moderate pieces of say 200 millions an order. When you want to enter the market that large, you want to be as anonymous as possible, all professional traders do this, because if you picked up the phone and called your broker or bank to place a 1 billion order, the next 5 minutes after your order have been executed, half of the worlds' traders will know about it and know who is having this position now. In a sense for professional traders, you are losing an edge, because you are giving the market and the traders out there more information. Professional traders don't like this, because it can turn against them. For example, Warren Buffet banged the world by saying that he is bearish on the USD and Bullish on the GBP early this year. Other Pros who don't share him the same opinion, will try to spot when is he going to probably enter his positions, and they will consider these entries as huge pullbacks, in which they will be selling the GBP at and buying the USD at."
------------------------------------------------------------------------

I have traded at a "professional firm" i have traded alongside some of the best traders in the market that take money from the market at a level most of us only dream of and i can assure you they dont have any fancy indicators, holy grail systems or inside knowledge, they follow price action and trends. They also pay attention to order flow, institutions and banks protect certain levels being triggered for reasons. Take the following example: A bank that wrote an option that will be triggered if the price drops below 1.2000, its in the banks interest to not let this happen because they will have to pay out to all the customers that took the option to buy at this lower price, their potential exposure could be billlions. SO the bank will try to prevent this option being triggered or expiring below this price (depending on the type of option). The banks will protect levels below 1.2000 buy buying the market above 1.2000, therefore creating demand, therefore creating a support level which we can all profit from by being the right side of the market, just look at last weeks price action on eurodollar if you dont understand. I'll see if i can find you a report that shows this happens and what traders look at

[tommyfx]

here you go:


"EUR/USD is easing off session highs of 1.2069 after another central bank
inspired bounce from 1.2000. Like yesterday, options-expiries at either end of
the 1.20/1.21 range are helping keep the market in relative check. Rumored
demand for EUR/JPY at the quarter-end London fixing is an ongoing underpinning
factor. Michigan sentiment and Chicago PMI are the main data focuses this
morning. Sentiment is expected to tumble on high energy prices while PMI is seen
edging back above 50 after plunging last month.
Stops are eyed in the 1.2075/80 area and below 1.1975. --
Jamie.Coleman@Thomson.com/rs"

These are order market insights that all traders look at, its all about supply and demand, where there is big buying prices rise, where there is big selling prices fall, where there are stops they will eventually be triggered and move the market because of an influx of buying and selling pressure. This is how professional traders analyse the market, they believe in supply and demand and psychology, i'm sure you will find it very profitable if you do also