How I Trade As If Price Is Random

[forexpipcatcher 10]

  mitsubishi said:

Forex pipsqueak (the methsmagician)just made everything perfectly clear.

Let's see if we can all predict his next post word for word :sleep:

 

Mitsupoofy you're even clearer ...once a loser always a loser hence your existence here right?

Foums attract losers and more and more losers like yourself, like always your lack of intellect won't phase me you waste of space. By the way when you say all you are putting all the losers in your class right? lol Idiots

[DbPhoenix 42]

  mitsubishi said:

Forex pipsqueak (the methsmagician)just made everything perfectly clear.

Let's see if we can all predict his next post word for word :sleep:

 

Now, mits. I think it's great that this guy has created software to beat the market. In fact, I'm surprised nobody has ever tried this before. I for one am eager to see how it all turns out. This may usher in a whole new era of trading.

 

Seriously.

[1a2b3cppp 10]

I assume from your name you are trading Forex.

 

I wouldn't recommend trading Forex like this but it's up to you.

 

I think the adds would be too far apart. If it works for you, cool, but I think you'd need more than a week of testing.

[zdo 20]

  mitsubishi said:

I never said you were a loser..you shouldn't be so sensitive...how can you be a loser when you've never made a single trade in your life? No, i'm happy with my original assessment of you.You are a pipsqueak.

Gotta advise you though,your clown act doesn't have much of a future...this is a traders forum.

 

Thank you. If he's this reactive before he goes live, it probably doesn't matter whether he trades "As If Price Is Random" or not... in a week or two...

 

(

..."in a week or ... "...

That stirs some memories... it's circa mid august 1985… demo has not been going well, only because there is no such thing yet, but… I will be going live with a real account next week…

)

 

 

... and a real mathemagician would have quickly and easily shown to those whose lives he is attempting to make a contribution to the difference between

authentically random

and

has all the appearance (and threats) of pure random, so therefore must be treated as 'random'

 

 

all my love,

 

zdo

[forexpipcatcher 10]

  zdo said:

Thank you. If he's this reactive before he goes live, it probably doesn't matter whether he trades "As If Price Is Random" or not... in a week or two...

 

(

..."in a week or ... "...

That stirs some memories... it's circa mid august 1985… demo has not been going well, only because there is no such thing yet, but… I will be going live with a real account next week…

)

 

 

... and a real mathemagician would have quickly and easily shown to those whose lives he is attempting to make a contribution to the difference between

authentically random

and

has all the appearance (and threats) of pure random, so therefore must be treated as 'random'

 

 

all my love,

 

zdo

 

I get it now this must be the losers forum i.e the dumb and dumber, hence why the 98% exist here, that's why you exist here and not out enjoying the spoils. I better go look for the other 2%

[zdo 20]

  forexpipcatcher said:

I better go look for the other 2%

 

Actually applying that would be Pure Wisdom.

 

All the best,

 

zdo

 

 

 

 

 

 

Have a great weekend all

 

 

 

 

 

 

 

 

ps: btw, imo it's closer to 3%

and ...too bad for us that you don't seem to care to modulate your 'angry inner put down queen'

[forexpipcatcher 10]

  zdo said:

Actually applying that would be Pure Wisdom.

 

All the best,

 

zdo

 

 

 

 

 

 

Have a great weekend all

 

 

 

 

 

 

 

 

ps: btw, imo it's closer to 3%

and ...too bad for us that you don't seem to care to modulate your 'angry inner put down queen'

 

You wouldn't know loser and it's no where near 3 fool and if you ever in this lifetime or your next get to the 2 side I would open the gate for you

[equtrader 10]

Stop arguing about math and fighting and concentrate on learnign how to trade because trading is an empirical thing.

[ed_inacloud 10]

  equtrader said:

Stop arguing about math and fighting and concentrate on learnign how to trade because trading is an empirical thing.

 

Good point equtrader, which I think is what the OP was trying to do in the 1st place.

 

To the wider audience......I do understand the sceptics of market randomness, I was one for many years until the evidence proved otherwise. What I dont understand is what they have to gain by rubbishing the views and flaming the posters. I appreciate that those making money from mug punters need to keep as many in the market as possible but hopefully we don't have too many of the former on the forum.

 

Now what would be useful is that if those that had a similar view about market randomness were allowed to share findings to see if it really is possible to beat it. Challenge it by all means but in a constructive way. I for one would like to be proved wrong, if there's evidence that it's not random then post it and help us all out.

 

Ed

Edited May 13, 2013 by ed_inacloud

[sergso 10]

[quote name=ed_inacloud;179959Now what would be useful is that if those that had a similar view about market randomness were allowed to share findings to see if it really is possible to beat it. Challenge it by all means but in a constructive way. I for one would like to be proved wrong' date=' if there's evidence that it's not random then post it and help us all out.

 

Ed[/quote]

 

Even if the markets are random you can stil make a lot of money by trading randomly even when you think you have a method. Click here and go to article "What you need to do to claim you are an accomplished trader".

[1a2b3cppp 10]

And now back on topic, if anyone is paying attention rather than arguing, I've been trading USLV (3x weighted SLV) with this method since April.

 

I bought 185 shares @ $10.81 on April 15th.

 

On May 15th I placed an order to buy 400 shares @ $9.00 which was filled on May 17th.

 

On May 17th I then placed an order to buy 800 shares @ $7.92 which was filled on June 11th.

 

And just again for the people who don't seem to quite get what I'm saying, I never said the market is actually random, I just said that it's random to me. It might not be random, but I have no idea how to predict it, so that makes it random to me. It might not be to you.

[marktheman 10]

Forgive me for jumping in. I have just found this thread by googling "random markets" and I am very excited to find this forum. 1a2b3cppp's original post was a breath of fresh air and has given me great hope that my approach to trading is the right way for me. I now know I'm not alone in the belief that markets move randomly and the best way to trade is to create a system that supports this belief.

 

I have done quite a lot of research creating artificial markets produced by using the rand() function in excel. It is a fact that all the charting characteristics appear in the random data; trends some amazingly long, market crashes, stagnation it is all there in my artificial markets.

 

I have taken the daily change in the dow since 1900 and applied random order to the data. The dow starts at the same level as in 1900 and finishes at the current level. You can randomize the data as many times as you want and this creates some very interesting charts; sometimes the dow will rise to 35,000 and other times it won't break 8,000, there are usually interesting bubbles and market crashes too.

 

As I speak the dow is trading at 15,180. I think we'd all agree that one day the dow will either fall 8% or rise 8% from this point. A fall of 8% will see it breach 14,000 and a rise of 8% will see the dow at about 16,400; it will do one of these two things first, but which one? In my opinion it is a 50/50 split. The things that effect the future stock market are also in the future and without a crystal ball we have no way of knowing whether the market is going to continue to rise or is going to fall.

 

My favorite trade is the comparison between the FTSE and Dow. I like to trade the broader markets because they are usually more stable than equity trading. I trade them as a pair (i.e. short on one and long on the other) and I will increase my exposure when the trade goes against me, adhering to strict rules and patiently waiting for the trade to go in my favor before selling at my target profit. The great thing about trading this way is that you are protected from a market crash.

[marktheman 10]

  1a2b3cppp said:

And now back on topic, if anyone is paying attention rather than arguing, I've been trading USLV (3x weighted SLV) with this method since April.

 

I bought 185 shares @ $10.81 on April 15th.

 

On May 15th I placed an order to buy 400 shares @ $9.00 which was filled on May 17th.

 

On May 17th I then placed an order to buy 800 shares @ $7.92 which was filled on June 11th.

 

And just again for the people who don't seem to quite get what I'm saying, I never said the market is actually random, I just said that it's random to me. It might not be random, but I have no idea how to predict it, so that makes it random to me. It might not be to you.

 

My concern using this method with an individual share is that its bottom price is zero. I think you run a risk of emptying your bank roll before the price recovers. Is your next move buy 1600 shares at $6.60 and then 3200 shares at $5.60? By which time you might not be sleeping too well. What you appear to be playing is the classic Martingale (Roulette doubling up system on red black). It would be very difficult to know at what point you should get out, if the price falls to $5 you might be relieved to get back to $6 but you may still be at a loss. Also, this could be a long game, many years before a share price returns to its former highs. I've bought shares here in the UK in the past at what appeared good value, one was Marconi and the other Bradford and Bingley (Bank), both went to zero. A share price on the day is fair value, there is no such thing as a guaranteed bargain (even Directors have no idea for sure which way their company's shares will go).

 

I think any stock or index has a 50% chance of moving up and a 50% chance of moving down from its current position and that is short term, mid term or long term. What is needed is a way of trading this safely and rationally.

 

I avoid stocks like the plague, I don't know them well enough and there are too many variables so I trade the Dow against the FTSE and sometimes the SP500 against the Dow, (I buy one and sell the other). There is virtually no risk of zero. I increase my exposure when the trade is going against me but any increase is at the same level as the original, I would never play the doubling up game.

[1a2b3cppp 10]

  marktheman said:

My concern using this method with an individual share is that its bottom price is zero. I think you run a risk of emptying your bank roll before the price recovers. Is your next move buy 1600 shares at $6.60 and then 3200 shares at $5.60? By which time you might not be sleeping too well. What you appear to be playing is the classic Martingale (Roulette doubling up system on red black). It would be very difficult to know at what point you should get out, if the price falls to $5 you might be relieved to get back to $6 but you may still be at a loss. Also, this could be a long game, many years before a share price returns to its former highs. I've bought shares here in the UK in the past at what appeared good value, one was Marconi and the other Bradford and Bingley (Bank), both went to zero. A share price on the day is fair value, there is no such thing as a guaranteed bargain (even Directors have no idea for sure which way their company's shares will go).

 

I think any stock or index has a 50% chance of moving up and a 50% chance of moving down from its current position and that is short term, mid term or long term. What is needed is a way of trading this safely and rationally.

 

I avoid stocks like the plague, I don't know them well enough and there are too many variables so I trade the Dow against the FTSE and sometimes the SP500 against the Dow, (I buy one and sell the other). There is virtually no risk of zero. I increase my exposure when the trade is going against me but any increase is at the same level as the original, I would never play the doubling up game.

 

USLV is weighted silver and I don't think silver is going to zero.

 

The next buy position is 1,600 shares @ $6.95.

 

I'm not using very much of my account on this trade so even if it takes a while to go back up that's ok.

 

I agree with you about not trading individual stocks like this. I only do the indexes, and now recently silver.

 

I am a little more nervous about the silver trade than the S&P so let's see how it goes.

Edited June 18, 2013 by 1a2b3cppp

[marktheman 10]

Forgive me, it makes more sense now. I think if your strategy permits buying silver at a catastrophic $3 then profit will come your way.

 

It certainly isn't for the faint-hearted as the metal is very volatile. Let's hope the dow will go into reverse and the metals will make new highs.

Edited June 18, 2013 by marktheman

[1a2b3cppp 10]

The $6.95 order was filled at $6.01 this morning when the market gapped down at the open. I got up and saw it was trading at $6.05 or so and was like "whoa, I wonder what price I got filled at" and then saw it was filled at the open.

[MightyMouse 12]

At one point in my life if I saw a train about to derail, I would watch it. At this point in my life I would look away.

[Patuca 13]

  MightyMouse said:

At one point in my life if I saw a train about to derail, I would watch it. At this point in my life I would look away.

whats the train and wheres the wreck?

[1a2b3cppp 10]

I assume he's referring to the way I trade.

[MightyMouse 12]

  1a2b3cppp said:

I assume he's referring to the way I trade.

 

You can employ your strategy successfully with a lot of different instruments if you are patient, but not all.

 

Also, as long as I can remember, I have never had a trade filled in a stock or etf 90 cents below where my order was. Unless...

[1a2b3cppp 10]

Unless what?

 

(message too short)

[marktheman 10]

Help me understand your silver strategy.

 

Round 1 - 185 @ 10.81

Round 2 - 400 @ 9.00

Round 3 - 800 @ 7.92

Round 4 - 1600 @ 6.01

 

Total investment after each round

 

Round 1 - 1888.85

Round 2 - 5488.85

Round 3 - 11824.85

Round 4 - 21440.85

 

I am assuming target entries are after 15% drop with a 100% increase in number of shares thus making next entry points as follows:

 

Round 5 - 3200 @ 5.64

Round 6 - 6400 @ 4.80

Round 7 - 12800 @ 4.08

Round 8 - 25600 @ 3.47

Round 9 - 51200 @ 2.95

 

Total investment after each round:

 

Round 5 - 39488.85

Round 6 - 70208.85

Round 7 - 122432.85

Round 8 - 211264.85

Round 9 - 362304.85

 

If we get to round 9 before a turnaround you will have an average buying price of 3.55 for your 102,185 shares showing a paper loss of $61,311

 

Is this correct?

[MightyMouse 12]

  marktheman said:

Help me understand your silver strategy.

 

Round 1 - 185 @ 10.81

Round 2 - 400 @ 9.00

Round 3 - 800 @ 7.92

Round 4 - 1600 @ 6.01

 

Total investment after each round

 

Round 1 - 1888.85

Round 2 - 5488.85

Round 3 - 11824.85

Round 4 - 21440.85

 

I am assuming target entries are after 15% drop with a 100% increase in number of shares thus making next entry points as follows:

 

Round 5 - 3200 @ 5.64

Round 6 - 6400 @ 4.80

Round 7 - 12800 @ 4.08

Round 8 - 25600 @ 3.47

Round 9 - 51200 @ 2.95

 

Total investment after each round:

 

Round 5 - 39488.85

Round 6 - 70208.85

Round 7 - 122432.85

Round 8 - 211264.85

Round 9 - 362304.85

 

If we get to round 9 before a turnaround you will have an average buying price of 3.55 for your 102,185 shares showing a paper loss of $61,311

 

Is this correct?

 

That is ridicules, it can never go that low.

[marktheman 10]

Why not?

 

If prices move randomly then after each round you have a 50% chance of the share moving up 15% or down 15%. You have already proved that you can go to round four. From this point on you have a 50% chance of executing round 5, 25% executing round 6, 12.5% chance round 7, 6.25% chance round 8 and 3.15% chance round 9.

 

I am saying there is a 3% chance that the share will go to $3 but a 97% chance it won't.

 

In a random market, which I strongly believe in, the share (at whatever its value and irrespective of where it has come from) has an equal chance of moving up by x% as it does as falling by x%.

[SIUYA 11]

  marktheman said:

Why not?

 

If prices move randomly then after each round you have a 50% chance of the share moving up 15% or down 15%. You have already proved that you can go to round four. From this point on you have a 50% chance of executing round 5, 25% executing round 6, 12.5% chance round 7, 6.25% chance round 8 and 3.15% chance round 9.

 

I am saying there is a 3% chance that the share will go to $3 but a 97% chance it won't.

 

In a random market, which I strongly believe in, the share (at whatever its value and irrespective of where it has come from) has an equal chance of moving up by x% as it does as falling by x%.

 

.....and there in lies why the concept of random markets is so poorly understood.