How Do You Know the Markets Aren't Random?

[Adrian 10]

@SIUYA You are quite right that most cannot cut their losses. It goes to the heart of this thread, where people have shown massive egos and a desire to dominate. It is these sort of people that need to be right that are never able to cut their losses and eventually fail at trading.Successful trading is all about being humble.

 

You raise another excellent point about 'facts'. This is what makes trading tricky. Clearly if there is a non-random bias in a market and everyone takes advatange of it, that bias will disappear. The weird thing is, there are many obvious biases in the market that people know about, and yet they persist. It seems the forces that create them are so powerful that no collection of traders can eliminate it by taking advantage of it.

 

Re your aside. I understand what your saying SIUYA, but frankly I have little time for people who have the wrong attitudfe. I welcome opposing views and information. As I requested to MM, but he backed away from providing any evidence at all to back his view that I was wrong. I respect those who respect others, but have no respect tfor those that don't. I fully stand behind my written word, unlike many others who will run when you put them under pressure of validating their words. I'm not here to 'endear' my self to people. The only people worth helping are those who are interesteded in helping themselves. Not those seeking a free lunch so to speak. You'll notice that occasionally there was a post from a reader who showed genuine interest, had genuine questions or comments. Those people received helpful and respectul responses. An adult discussion. I have no problem with people disagreeing with me, although technically they aren't disaagreeing with me, but the hundreds of research reports written by many different people over decades. And yet they attack me and disagree without providing one skeric of evidence to validate their disagreement. They are like the moron politician who isn't in power, and they see their job as attacking the policies of the one in power, no matter whether the policies are good or not. That's people for you. Mostly a seriously screwed up bunch.

[dangermouseb 10]

@dangermouse ... If you had actually read my posts and had your brain switched on, then you would know this. But this is the crux of the problem. Like so many people in the world Danger, you represent so many, who want something handed to them on a platter, but even then that is not enough, as so many people are simply non-thinking zombies, incapable of using the measgre intelligence they have..

 

You know you're right... I appologize for not having my brain switched on and wanting something handed to me on a platter and being simply a non-thinking zombie... I now realise the error of my ways...

 

Thank you for your insight and wisdom to my situation...

 

:doh:

[Adrian 10]

My pleasure (risk adjusted sarcasm)

[MightyMouse 12]

@SIUYA You are quite right that most cannot cut their losses. It goes to the heart of this thread, where people have shown massive egos and a desire to dominate. It is these sort of people that need to be right that are never able to cut their losses and eventually fail at trading.Successful trading is all about being humble.

 

You raise another excellent point about 'facts'. This is what makes trading tricky. Clearly if there is a non-random bias in a market and everyone takes advatange of it, that bias will disappear. The weird thing is, there are many obvious biases in the market that people know about, and yet they persist. It seems the forces that create them are so powerful that no collection of traders can eliminate it by taking advantage of it.

 

Re your aside. I understand what your saying SIUYA, but frankly I have little time for people who have the wrong attitudfe. I welcome opposing views and information. As I requested to MM, but he backed away from providing any evidence at all to back his view that I was wrong. I respect those who respect others, but have no respect tfor those that don't. I fully stand behind my written word, unlike many others who will run when you put them under pressure of validating their words. I'm not here to 'endear' my self to people. The only people worth helping are those who are interesteded in helping themselves. Not those seeking a free lunch so to speak. You'll notice that occasionally there was a post from a reader who showed genuine interest, had genuine questions or comments. Those people received helpful and respectul responses. An adult discussion. I have no problem with people disagreeing with me, although technically they aren't disaagreeing with me, but the hundreds of research reports written by many different people over decades. And yet they attack me and disagree without providing one skeric of evidence to validate their disagreement. They are like the moron politician who isn't in power, and they see their job as attacking the policies of the one in power, no matter whether the policies are good or not. That's people for you. Mostly a seriously screwed up bunch.

 

Do us all a favor, provide the proof that you are right. Try to do it without posting hedge fund propaganda.

 

It is funny how the criticisms you seem to throw categorize you perfectly.

 

You blurt out emotionally driven and false conclusions as if you are are brimming with them and cannot deal with anyone questioning your evidence and you claim to know people. And hence, MM should not trade because he will lose all his money.

[Adrian 10]

@MM Trying to divert your personal problems onto me MM won't change the facts. My 'emotionally dirve' repsonse as you call it, is mertely responding to most of your childsh attacks, that contain zero evidence, which you still continue to avoid. I have zero intention of following up with any further information to satisfy your requests, as you are simply not a human being worthy of bothering with. It is ironic that all the comments you make are actually a very apt description of your own behvaviour, and no amount of posts will ever change that. Your attempts to try and paas blame to me is typical of your character, which I detected very early on. You arre merely a trouble maker trying to stir the pot. Frankly no one cares for your type, except perhaps to make fun of As I suggested early on, you really need to see a therapist, as your personal insecurities appear quite severe. Please do not bother to post on this thread again, as you have never posted anything of value to anyone. The people with brains and common sense, who have read my posts, have all the information they need to go away and prove to themselves the markets are not random. It is plainly obvious though that you are one of those idiots I refer to, who are incapable or wanting to see the obvious. You suggest I cannot deal with anyone questioning my evidence, even though the factual evidence shows the exact opposite LOL. You are truly clueless. Only the odd post like yours where you basically say I am wrong, make some silly and undefined reference to industry propaganda, which I'm sure no one has a clue what you are talking about, then provide zero evidence or even any logis or justification at all as to why I might be wrong. I think we must all ask the question why you have such a desperate need to prove to believe markets are random? Is it becasus you keep losing your trading accounts? Either way, your response are pretty much the worst kind of Neanderthal responses, that are of no value to anyone. This will be my last reply to you MM, as you have clearly shown to everyone here that you are not a person worthy of even validating your existance. If you continue to harrass me and others on this thread I will report you to admin and have you barred.

[zdo 20]

...I will report you to admin and have you barred...

 

:helloooo:

While you're at it, please report me and have me barred also... and banned too...I "have the wrong attitudfe"

Thanks.

[SIUYA 11]

:helloooo:

While you're at it, please report me and have me barred also... and banned too...I "have the wrong attitudfe"

Thanks.

 

now remember Zdo, only you can help you.....if you want to get banned you must do a better job, show more discipline and focus.

[MightyMouse 12]

@MM Trying to divert your personal problems onto me MM won't change the facts. My 'emotionally dirve' repsonse as you call it, is mertely responding to most of your childsh attacks, that contain zero evidence, which you still continue to avoid. I have zero intention of following up with any further information to satisfy your requests, as you are simply not a human being worthy of bothering with. It is ironic that all the comments you make are actually a very apt description of your own behvaviour, and no amount of posts will ever change that. Your attempts to try and paas blame to me is typical of your character, which I detected very early on. You arre merely a trouble maker trying to stir the pot. Frankly no one cares for your type, except perhaps to make fun of As I suggested early on, you really need to see a therapist, as your personal insecurities appear quite severe. Please do not bother to post on this thread again, as you have never posted anything of value to anyone. The people with brains and common sense, who have read my posts, have all the information they need to go away and prove to themselves the markets are not random. It is plainly obvious though that you are one of those idiots I refer to, who are incapable or wanting to see the obvious. You suggest I cannot deal with anyone questioning my evidence, even though the factual evidence shows the exact opposite LOL. You are truly clueless. Only the odd post like yours where you basically say I am wrong, make some silly and undefined reference to industry propaganda, which I'm sure no one has a clue what you are talking about, then provide zero evidence or even any logis or justification at all as to why I might be wrong. I think we must all ask the question why you have such a desperate need to prove to believe markets are random? Is it becasus you keep losing your trading accounts? Either way, your response are pretty much the worst kind of Neanderthal responses, that are of no value to anyone. This will be my last reply to you MM, as you have clearly shown to everyone here that you are not a person worthy of even validating your existance. If you continue to harrass me and others on this thread I will report you to admin and have you barred.

 

emotion emotion emotion. I drink soda and read your response for entertainment. I have no desire to prove anything to you and I never ever stated that I think markets are random. I simply stated that you were using bullshit hedge fund industry propaganda.

[Adrian 10]

@zdo I believe self reporting is always available

[Adrian 10]

@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.

[MightyMouse 12]

The topic is are markets random. The question has been asked a millions times around the world. Economists will give you one answer, simply because they do not know how to look at a market. Research by traders shows a completely opposite viewpoint. The answer as to who is right is obvious, because the hedge fund industry are the ones generating the postive returns year after year based on their research that markets are not random.

 

It is very difficult to use the hedge fund industry as a yardstick since they do not all trade the same markets or take the same risk. If you did break them down by risk and market, you'd find that, on balance, per dollar risked, they underperformed the markets they traded. And, you'd certainly learn that their positive returns are not quite what they are promoted to be. Such findings do not support your theory of non-randomness and does bring to light the fact that markets are negative sum.

 

It seems that you cannot recall your original use of hedge fund industry propaganda, so I have provided you with your original statement for you to review and I also provided my original response. After all your emotionally charged tangents, divergences, accusations, criticisms and insults, my statement is the same. if you take the time to do the research and or look beneath the surface, you will find that the returns achieved by hedge fund managers are not what they are promoted to be. If you are using their returns as support to the theory that markets are non random, then it is not a good source of support since the results are not what they seem to be.

 

My source of amusement is how an individual can get so worked up by someone suggesting that he should do more research on a topic.

 

Whether hedge fund industry returns are relevant to the topic of random or non-random markets is another story. But, this is a forum and posts and thoughts can lead to other topics without a hitch if the participants are civil.

[Adrian 10]

@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

[bobcollett 10]

:helloooo:

While you're at it, please report me and have me barred also... and banned too...I "have the wrong attitudfe"

Thanks.

 

Hi zdo

You cant get barred until you have sorted out the Eurozone

regards

bobc

[SIUYA 11]

and in the left corner we have Adrian representing some country in Europe.....and in the right corner we have MM representing another country in Europe.

 

Lets get ready to rummmmmmmmble

ding ding.

 

The Eurozone crisis in a nutshell.

Maybe you guys should just lend money to each other....

[MightyMouse 12]

@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

 

Well I am sorry that my new toy powered by perpetual emotion is putting me on ignore. You have been an asset to the thread.

[zdo 20]

Lessons are for everyone, not just for 'newbies'. What you take or don't from anything varies based mostly on your experiences. Random data showing aspects of real data is intriguing to me, but I'm not saying that you should take that in any way in particular or even agree that there are similarities. The point is to have a discussion about it and maybe all grow a little wiser.

TheNegoc8r

Post 30

http://www.traderslaboratory.com/forums/technical-analysis/10728-question-randomness-4.html

 

Let’s go up context a little bit –

... “dumb”, "obvious" questions, but in that spirit that I might learn something…

Why do traders even care about random / not random in streams?

Why do traders even care about random / not random in trade outcomes?

[zdo 20]

One more time

How and why is random, not random ("random-like") even an issue?

[Adrian 10]

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

[SIUYA 11]

One more time

How and why is random, not random ("random-like") even an issue?

 

personally as stated - i dont think it is relevant,

I think the original poster/thread starter was more or less trying to get into the ideas of micro structure models for the market. It then became waylaid with other ideas.

 

http://www.traderslaboratory.com/forums/beginners-forum/11394-where-would-great-place-have-discussion.html

[Adrian 10]

@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 20]

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

 

reread this thread?!

by a small clustrfk of posters who are somehow not “fooled by randomness” ?!

or by correlation :snicksnick:

… just shoot me

 

better to wait a while and open a totally absurd new thread… and hope…

 

“…just breathe…life’s like an hourglass glued to the table…”

[ame=http://www.youtube.com/watch?v=UTb1jy-Vkmw&feature=related]Anna Nalick - Breathe - YouTube[/ame]

[Adrian 10]

@zdo Goodluck on waiting a while :doh:

[SIUYA 11]

@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?

 

where do i say they are random?

 

I said I dont care.....and in actual fact you can develop models that do create positive returns from random data.

This is where you and others have not defined random. While you may believe that markets are not random....you are following/pushing/extending the idea that because markets are random then you may as well invest in the market and not in certain managers. Then you require the issues of benchmarking.....hence the whole waylaid thread.

 

I am not benchmarking to a particular index so what do I care. I dont think markets are random as price points are not independent of previous prices.

[Adrian 10]

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?

[TRADEZILLA 10]

Following on from "The Question of Randomness" thread. How do people know the markets aren't random? I'm up for creating some random data to see if someone can show me how they know it's random or not - just for fun... DM

 

Even if it is random, it doesn't mean you can't capitalize from it. When you play blackjack, your wins and losses are random.. as a matter of fact, a little worse than random, but what happens if you learn how to count cards? You have put the random outcome in your favor. The same concept can be applied to the market. If you can manage to get an edge even a small one and trade in a way that allows your edge to kick in, the randomness of the market will favor your outcome, and though this is very possible, its much easier said than done because many aspects have to come together for this to happen; discipline, risk management and etc... and given that your edge is solid in various market conditions.