Can a random market be traded?

[IFocus]

Some elementary charting from Leavitt Brothers for TA's and FA's to think about

http://rs6.net/tn.jsp?e=0015LbSMsAE...qBt8sZaX0is3iAExqT1Zpzl-qpIrHCPyCmb0DvygtOQ8=

 

[motorway]

So what ?

The more important question IS can a market that is not random
be traded !

What is the opposite of random ?

Manipulated

Can you trade a manipulated market ?

That is the more important question ?

Because everyone is manipulating. That is the market reality..

Random is random ( and note His version has no discontinuity )

It is not the random Knife that stabs you in the back
But the manipulated one

motorway

 

[IFocus]

Hi Motorway

The issue of manipulation wasn't covered nor was the various levels of volatility nor was a thousand other viable's or the zillion of participants that make up the market not sure what the "so what " is about.

But if you wish to discuss manipulation and being as you put it "stabbed in the back" the the level of volatility combined with time to achieve that becomes the primary considerations as no one controls the market or market trend for a sustained period.

I would have thought position sizing / money management / strategy (tested) would be the discussion for getting though or capitalizing on a possible "manipulated market"



As I said it was an elementary charting exercise........surprised at your tone.....


Focus

 

[Timmy]

IFocus - -thanks for the link, it was a bit of fun, but considering those two questions shows a lack of grasp on reality from the presenter (although he was probably just having a bit of fun too).

Why would a market be random? What benefit could that be to those who stand to benefit most from a market? In this respect, and in many others, the market in financial instruments, be that shares, bonds, currencies, futures, whatever, is NO different to a market for any other product Would toilet paper (for example) manufacturers, distributors, and retailers allow that market to function randomly - no they would not - how would they fund their businesses if their presentations to the bank included lines about their ability to repay debts being dependent on winning in a random market?

The market for toilet paper is structured and managed so that the manufacturers, distributors, and retailers can make a profit, and as much profit as possible. It is not easy for them to do this, they must fight off competitors, market their products, differentiate them, mark the price up when they can, mark the price down when they have to,and so on. Call it, as Motorway has, manipulation - there is nothing sinister about manipulation, it is a fact of life and a fact of markets.

So Motorway has asked a much better question, a question that is relevant to us as traders:
Can you trade a manipulated market ?

I would rephrase it slightly to:
Can I trade a manipulated market ?
(Because while I would be happy for you if you can trade it, at the end of the day what I am most concerned about is can I trade it?)

Markets are traded successfully, and much more importantly, consistently successfully, by only a few traders. If a market appears random and I am not trading successfully it is because I do not yet know and do not yet do what these consistently successful traders know and do. It is simply a matter of finding out what to do and then do it. In a nutshell that means coat-tailing the successful traders, coat-tailing those doing the manipulation. Find the manipulation, uncover the tracks quickly, and follow it.

Price in a financial instrument is pushed and pulled by selling and buying, nothing more - uncover this selling and buying, and understand it, and I will profit. Uncover it and understand it consistently and I will have the grail.



One final thought, if a market was random I would suggest there would be many more successful traders, at least in the short term. Because if it is random everyone has an equal chance. In our markets the great majority have a less than equal chance, and that is reflected in results. Those who ensure their chances are greatest are those that do the manipulating, and those that can uncover them and do what they do.


IFocus - thanks very much for starting the thread - very useful topic to discuss and uncovering what is important.

 

[motorway]

He defines a random mkt as one that moves
in discrete steps at a time +1 0 or -1

By that definition ( his ) the mkt is not random..
So that is the So what !

He demonstrates that it is possible to trade using TWO
charts that have nothing to do with a market reality..

The So what was just a invitation for further discussion..


Imagine You are trying to cross a road
and the cars are all programmed to move at a constant speed

forwards backwards or still by one unit ...

And someone demonstrates that you can safely cross

So what ?

Because the real world is not like that
and there are even drivers in the mkt
that will try run you over
and there isn't even a speed limit
and the cars can suddenly appear out of ( seemingly ) nowhere

( gaps ) etc

Your offer

to think about

was taken up

I thought "so what"

some thoughts
motorway

 

[motorway]

surprised at your tone

misunderstanding..

Just think thinking random
is a dead end .

IFocus - thanks very much for starting the thread

Agreed.

The market for toilet paper is structured and managed so that the manufacturers, distributors, and retailers can make a profit, and as much profit as possible.

Yep everyone wants a profit
even on the stock market everyone

motorway

 

[IFocus]

misunderstanding..

Just think thinking random
is a dead end

Now I understand your point Motorway thanks for the reply