Adrian

ps @URMA Did you know your trackball mice are breeding? :rofl:

@URMA The photo actually looks like the desk of a 'wannabe' trader. Someone who thinks they work for a bank and wants to impress their friends. Now a real trader, such as say Al Brooks, he trades from a notebook, just one screen, and one 5 minute chart. He's been doing it every day for 10-20 years to my understanding. I would definitely NOT want to give my money to a guy who's trading desk looked like yours. The correlation between screen numbers/indicators displayed, almost certainly varies inversely with profitability. You might be a great coder and perhaps analyst, I really have no idea on that though. I'm impressed by people who have an idea, which they are willing to sell/share, and have the ability to show how well the indicator works compared to current or past methods, and why it is outperforming. This is NOT done by showing 1 or 2 chart examples, or simply saying 'my indicators are great and yours are no good';.

@ URMA Is there a reason you wish to keep them uninformed on the 'other issues'? Seems particularly odd since you and your trsader associates never trade FX, so why would it matter sharing? I also know an FX trader, who makes money almost every day he decides to trade, and almost never has a losing day. So for him, the 'other issues' must be pretty special that he wants to trade TFX rather than avoid it. LOL.

@URMA Thanks for answering what I needed to know. You clearly do not trade, nor, by definition use your own tools. Neither the SEC nor the CFTC stop anyone quoting performance numbers, and many do. In fact a massive number do, and all perfectly legally. The fact you quote data providers as an example (who do NOT market trading methods at all) shows you are a neophyte trader or market participant, so I will therefore give no further consideration to anything you market. @Bobc Yes, his tools all fall over if one wishes to trade FX, due to no volume So another reason to simply bypass all his tools.

@URMA I'm not bashing you at all. Merely seeing a new tool and asking for you to show us how it is superior to the traditional price divergence method. Nothing complicated from your perspective based on the posts you are making. Do you not trade your own tools? Do you not have a track record or back tests of your own that proved to you they were superior before you started trading with them? Without any of this information your words would ring hollow surely? So I sam assuming you're an intelligent guy and have all the backup work to prove what you are sellling? When I see a website that offers no guidance in that area, it usually means the tool has little true value. A couple of flashy charts on a website doesn't really prove much. I'm sure you'd agree with that. And while a tool isn't a system, a tool still has to have some level of usefulness for it to have any chance of working in real time.

@URMA prove statistically to us that your order flow method is superior to regular divergence. It would genuinely be fascinating to see just how different it was if done under proper testing. Seems your website is completely devoid of any validation of the accuracy of your tools. Only a fool would buy something without one skeric of proof of how useful they were, and only a bigger fool would actually lease them, under almost any conditions.

@URMA Would you mind posting some charts showing examples of where your divergence worked and regular price divergence did not work please.

@SIUYA? Are you going off the rails as well? What on earth are you on about when referring to other peoples mental capcities? Are you taking your own thread off topic already? LOL I thought you created this thread to discuss the same topic that was discussed in the prior thread? And people wonder why they have difficulty making money in the markets LOL. I'm sorry you feel the question as to whether markets are non-random wasn't answered in the other thread, but in fact it was, and extremely clearly to those who chose to keep an open mind and read what was written, rather than all the other smoke and mirror posts by people. If this thread is 'Can funds outperform the market" then yes, with 100%+ certainty. I can name hundred of funds that out perform the markets, both short term, medium term and long term. Any markets. Although strictly speaking I have no idea which markets you are referring to as there are literally tens of thousands of them out there. May I suggest you reask your question but in a more defined manner, as clearly the answer is rather absurdly obvious. Just as there are many funds that underperform the 'markets'. So what? I'm sure you have a higher goal in asking such a question. But unless you tell us then, there really is nothing to discuss, as your thread question was just answered.

Some nice references SIUYA, but why start up the same thread again when it was already answered in the prior thread? You know you will never convince the people who don't want to know or those who don't wish to admit to reality. You only open yourself up to people who will come in and criticise ther evidence without any real evidence. For traders who are experienced and profitable, well they already know the answer. It is obvious quite frankly. There are many people in the funds management business though (just like any business) who really do not understand what they are doing. Some get lucky occasionally, but mostly end up failing over time. To determine which are which though involves watching their performance numbers through a full market/commodity cycle or even longer.

@SIUYA Actually NO. I do not try to build in all market conditions. If you discover a bias, you discover a bias. End of story. It works in the type of market that it works in. It is up to you to make sure that it only operates in the environment where your bias works. So that is hardly making it work in all market conditions. You ust need to make sure it doesn't fire under conditions which are not favourable to it. The vast majority of models are only suited to a limited range of market environments. Only the very best can work in most market conditions.

@Hardman You mean there always seems to be people wanting to buy and sell? Yeah. I find the same too. Don't the markets ever change?

@TRADEZILLA Any decent model will work in all market conditions. That being said, 99%+ of publicly available models don't work. I must also add that when I say working in all market confitions, that simply means you are smart enough to know the conditions (which will be in your model) of when to switch it off. Pretty basic really. Most models don't work in really low volatility, so simply put a filter in there to prevent it happening. So it isn't an IF at all.

This conversation is getting too messy and heading in too many directions so I will try to keep things simple and in point form. 1. We both agree that markets are NOT random. From my point of view I am convinced of this with 99.9% accuracy based on 30 years of experience in every aspect of market analysis/system testing & design/live trading & model trading/endless numbers of research reports that have passed my eyes, and simply through common sense. One could easily write a book showing how markets are NOT random. 2. There are many ways of showing markets are not random. Whether it be good mangers consistently out performing the markets, or via simple trading models taking advantage of small biases here and there ( some of ewhich I have discusse din this thread) or via technical analysis and the intricacies of how each swing is mathematically related to some prior swing. 3. I believe I fully understand what random means. It means totally independant action from one event to the next (i.e. no memory). Whether it be card games, financial markets or even any series of events in life. Question is, what if red at roulette paid 2/1 instead of even money, would that change the randomness factor? Here's how I see it. It would still mean it was totally random as to whether the ball landed on red or black, but we now have a bias. We know that playing red has a +EV. So I think this is what you mean perhaps when you say you can make money from a random process. From that point of view every game of chance is random or a series of probabilities for each outcome. The thing is we don't care aobut that, or shouldn't. We should only care about EV. If we discover a bias, by definition one side of it must be positive. so we trade it, even though we have no clue as to whether the next rtrade will win or lose. It might win only 30% of the time (longer holding period)or maybe 70% (short term trade), but if our research shows a bias of some kind then we make the trade. So in summary I can see how a person might say even if the markets are random, it is still possible to make money. It depends how you define random. I do not consider just half the equation (the win%) when considering if something is random or not. Only beginners seek trading models with high win% without consdering risk too much. 4. You don't believe people can create trading models, run them and make money? I'm guessing you aren't overly experienced in that area, but I can categorically state that you are wrong. If the model is properly optimized to true market characteristics (i.e not curved fitted) then there is no reason whatsoever that a mechanical model cannot continue to work for years into the future. In fact some of the most successful hedge funds in the world do exactly that. Many of the quant funds do just this. Many of the CTAs do just that. 5. Why do people require models to prove or disprove a market is random? Well, they don't, but why waste time doing market research if you aren't going to create a trading model from it? Kill two birds with one stone. Either way it doens't really matter. You can do mathematical research to test if a bias exists(i.e. such as th eyearly seasonals). Then once you have shown it does exist, you can then create a set of rules to take advantage of it. 6. Unless you can create a formula to replicate human action, then the fact that price changes are caused by humans as distinct from a ball rolling around a spinning wheel where red pays 2/1, is all largely irrelevant when it comes to detecting non-randomness, and creating trading models. We merely seek something that is reliably +EV. Why would I care if it occurred in poker, blackjack, a biased roulette game, or financial prices? The main advantage of the latter though is that a person can wager almost unlimited amounts of money. In a casino you'd be lucky to last a week before being kicked out LOL Hope this clears up some points.

Hi SIUYA, Not sure what all the points are you are listing. There is a million things there which you have said which can branch out into a million other topics, and it all is largely irrelevant to this discussion thread. A model is a model. Whether a good or bad traderis executing is is not relevant here. It has no bearing on whether markets are random or not, and no bearing on how to create a model is the markets were random. You seem to have completely avoided your own s in your prior post. You said you dont care whether markets are random or not. And that it was possible to create a model that was profitable even if markets were random. It seems to me the latter is impossible, as it has been proved many times by many people over the years. but you seem to think otherwise. so my question was what sort of model do you create that can overcome a randomm market and make money? The discussion is a theoretical one clearly for obvious reasons. Market are EXACTLY like gambling outcomes. You have a trade win% and you have an average payoff. The only difference is the unit loss can be bigger than you progject, but it can also be smaller. but the same formula and theory all apply, such as optimal bet sizing etc. you say gambling outcomes are independant. Only if you have no skill. At poker and blackjack they aren't independant, otherwise it would not be possible to win. Tha tis th epoint I kept trying to make in prior posts, but clearly neither you nor Tradezilla seem to understand what is obvious. Exactly the same concepts apply to markets. If you have zero skill, then it is 50/50 whether markets rise or fall, but to a skilled trader he can wager in certain circumstances where th eodds are well above 50% while maintaining a reward/risk > 1. So clearly the price are not independant. So this is exactly the same as in poker and blackjack. If you never get past this point and understand it, all that follows in your line of thought will be wrong.

@TRADEZILLA Glad to see you back on track My question though wasn't a change of subject all. The thread is titled "How do you know the markets aren't random?". The exact reason we want to know the answer is so that we can design models that have a chance of making a sustained profit. Then SIUYA comes along and suggests he doesn't care whether a market is random or not, and that a profitable model can be made even if markets are random. So my question was how?

@TRADEZILLA I think you have come in half way through this thread, or the tail end actually, and missed most of the point that was being discussed. I NEVER said markets were random. Please go back and start reading from just before you started posting again. We are not talking a different premise. I am talking from exactly the point of view that I explain if my words are read. I was responding to a post made by SIUYA and offered a scenario of assuming markets were 100% random, and how would people profit. Then you came along and now clearly started a discussion which has been completed pointless as you never understood what transpired right before you posted. It is important one read the posts before posting. Also you misunderstood my reference to academics. You seem to miss the point that this whole discussion is discussing a theoretical scernario, and I was just giving an example of someone doing research and not finding anything. It could have been anyone. So once again TRADEZILLA, please familiarise yourself with the thread BEFORE starting a line of conversation which turns out to be completely misinterpreted. My question, following on my SIUYAs post, is how does one go about creating a profitable model if the markets are in fact 100% random, and random in every sense of the word i.e. no study is able to find a bias of any kind. SIUYA believes it is possible. Do others? On what basis?

@TRADEZILLA I feel you are confusing your own description. To a non-counter the cards fall in a random fashion. So he will go away and say the game is random and cannot be beaten. Then the counter comes along and says the cards fall in a manner that allows him to make a profit by counting cards. Therefore, to him, the cards do NOT fall in a random fashion. When the count is high we are more like to see TEN value cards fall. So this is NOT random. The financail markets are no different. An academic will write a paper saying he could not see any pattern in the test he did, so therefore markets are random. Just because a person cannot see the non-randomness does not mean it doesn't exist. It merely comes down to how you analyse price behaviour. So what you are describing is changing what is appears intrinsically to be a random process to one person, into a non-random process to another due to the way they look at the market. Therefore, if he can do that then the market by definition is NOT random. Otherwise he would have ZERO chance of making a sustained positive return. This has been proven time and again mathematically. I don't know if that is any clearer TRADEZILLA?

@TRADEZILLA What you are describing isn't randomness. By counting the cards, you are changing the odds from being random to not being random. That is why card counters can win. They know that a batch of big cardds is more likely when the count is very positive. And even if your wins are < 50%, you get a higher payoff for blackjacks. It would be like saying a biased (55H/45T) coin toss is random, when in fact it isn't. We know with certainty that the probaiblity of a Head falling will move towards 55%. Even though we have no clue what will fall next. If we get an even money payoff betting heads, then as long as we do not wager more than twice the size of our advatange, we will win in the long run. So my question still remains. How does one profit in a market if we asume it has totally random price moves?

Hi SIUYA I didn't suggest you said they were random. You said you didn't care either way, so I proposed the question about how to make money if they were random. If you believe you can develop a model that makes money, then aren't you also saying that you could make money in a 50/50 coin flip game as well? And yes we all require benchmarking. What is the point of making money with a model that generates a 2%pa return with 20% drawdown? Pointless. I can put my money in the bank and earn 6% zero risk. So yes, benchmarking of somekind is very important. It doens't or shouldn't be against the S&P500 if that is what you are implying. Why think you are doing well when you lose 10% because the market is down 20%. That is also dumb. So ignoring the fact that we both think markets are non-random, I am intrigued how you believe you can create a 'viable' model that makes money in a random environment?

@zdo Goodluck on waiting a while :doh:

@SIUYA. If markets are completely random, on what basis would you expect to create a trading model/method that was capable of generating reliable and good risk adjusted returns, or any consistently positive returns at all?

@zdo. The question has been answered. Please reread the thread.

@MM You certainly do try to make a mountain out of a mole hill. We are all getting a lot of amusement from the display of your stupidty. That's for sure. So why are you all worked up, as you put it? I know I'm not, and no one else is. My posts have merely stated the facts and what follows on from those facts. Nothing too special really. It appears though you are unable or unwilling to interpret those words for what they mean, but wishing they were said with emotion and gusto blah blah. No. I've seen your type many times before sadly. I've simply expressed my disappointment that you display such characterisitcs but I know you can't help it. I'm quite serious when I say you need help. You keep trying to suggest I am the emotional one when nothing could be further from the truth. Calling you an idiot isn't a statement of emotion, it is a statement of observation. You clearly know nothing about peoples behaviour or recognising what state they are in. You might want to spend some time on that. And I do perfectly recall your statements where you provided zero facts but attempted to mislead others by trotting out some anti-hedge fund propaganda. Of course anyone can produce adverse statistics if you get specific enough and look hard enough. None of that changes the point I made when stating factual information and its source. You know that. I know that. But we both know that wasn't really your agenda. You simply wish to stir the plot and show how stupid you are, which you have achieved brilliantly I must add. None of your posts have added one iota to the disussion, but only detracted and wasted my time. Your responses are always the same, boring, useless to everyone, and containing no information of value at all. These are the facts whether you wish to admit it or not. And while it is a great source of amusement to us all to read your mindless chit chat and attempts to pass blame etc etc (classic life loser mentality), I can honestly say you have wasted your time, as no one cares about you. I have now put you on ignore and hopefully, knowing that I cannot see yoour posts, it will stop you constantrly attempting to harass me with unfounded claims and rather nauseating posts. I have better things to do than waste my time writing these posts, but I do wish to open peoples eyes as to just the type of person you are. It is textbook characteristics like yours that help everyone make money. So in the end we are thankful your type exists as traders. We just aren't interested in knowing or talking to you. LOL

@MM I agree You need to use less emotion and clearly drink less soda. Perhaps you are on a constant sugar rush and therefore always feel on edge. so your posts are full of emotion and abuse. We know you tell us you read my posts for entertainment, but everyone knows that is a lie, and you it is dead serious to you. As I stated in my last post, you clearly had a desperate need to state the view you did. Only you know thr true reason why. And we all know that not one word of what I stated was industry propaganda. Not a single word. In fact most of the information I provided had nothing even to do with the hedge fund industry. Fascinating how you conveniently ignored all that LOL But you believe what you need to MM to support your own falwed belief system. It is a shame you even exist on this forum, as you have now clearly stated you made comments with zero intent of ever providing anyone with helpful information. I think that pretty much sums you up.

@zdo I believe self reporting is always available