Price Action Patterns Do Not Mean the Market Isn't Random

[SunTrader 10]

is this a

Thinking, Fast and Slow

thread or what ?

 

Too much credit there.

.

[Patuca 13]

and of course this is just my opinion. I am sure it will be ignored by those who find it puts them in an uncomfortable position....

 

This to me is the prototypical adolescent response to an obstacle....

 

A black/white comment....it will be (fill in the blank) until I find out differently....here's a news flash, the market doesn't care about your pronouncement.....

 

As with most things in life, its NOT black/white....markets cycle from random to non-random all the time, on every time frame...if a participant cannot discern when/whether a market is exhibiting random/non-random behavior...that just means they are amateurs and therefore the best they can hope for is purely random (or worse) results if they put money at risk...

 

Teaching people to do this I start with the obvious...every earnings season, we see "bellweather" companies report. In anticipation of these reports, markets exhibit non-random behavior....after the reports come out, again markets exhibit non-random behavior..this is true for specific economic reports as well (FOMC being the most obvious). a small child could see this....

 

Within the intraday session, futures market exhibit non-random behavior at specific times of the day.....these non-random behaviors are correlated with the open, with the close of cash and the close of the RTH session (to name a few)....again its very obvious, but it requires the ability to think critically to make use of it....and unfortunately most of you don't have it.....so you end up making silly statements about what the market is and isn't....that's pretty much the height of ignorance....

 

Good luck

sh...sh..sh..1A ...don't you know that..superior intelligence hath spoken...everyone else is either adolescent or infantile..with sh?t in their pants and screaming for a bottle.. Besides aren't you aware that you are messing around with sacred cows? carry on ole chap just be ready for the rotten tomatoes amd eggs to pelt you..and this is coming from someone who believes the markets are NOT random but are ordered..manipulated...structured...and predictive...

 

but i just love it when someone has the gumption to go against tradition..swims against the current..questions the present authorities...

 

carry on my friend....

Edited June 16, 2013 by Patuca

[steve46 12]

Patuca

 

I have noticed that generally you wait until people "leave the field" then come in to deliver your insipid little "drive by" bullshit comments...("Yeah you tell'em....good for you")....but there's never anything of substance, and you never really take a stand.....sort of a mental eunuch.

 

I wish there was something positive to say about it (or you)....but there isn't....

[Patuca 13]

Patuca

 

I have noticed that generally you wait until people "leave the field" then come in to deliver your insipid little "drive by" bullshit comments...("Yeah you tell'em....good for you")....but there's never anything of substance, and you never really take a stand.....sort of a mental eunuch.

 

I wish there was something positive to say about it (or you)....but there isn't....

LOL:rofl: LOL:rofl: LOL:rofl:

[BlowFish 10]

Despite the heavyweights already leaving the field I'll chip in a couple of points that don't seem to have been made yet.

 

OP, Just because a random sequence (the coin toss of your example) exhibits similar patterns to a financial data series you simply can not conclude that the latter is random too. That's just logical fallacy.

 

If you do even rudimentary statistical analysis of financial data series it seems pretty clear that they are not random. (Though IMHO certain market phases are more so than others). Benoit Mandlebrot has done a lot of work on the subject that you might find intresting.

 

Of course just because the data is not random does not mean that it can be predicted. And to finish on a practical note it is not necasary to 'predict' to trade successfully. Finding good trade location (somewhere that you can have a tight stop with a decent target for example) is more important to me personally. So next time there is a six sigma event you might want to go in hard, you are not going to get another one for another 1.5 million years (if you are in the random walk camp). That's good trade location.