NexusFi: Find Your Edge


Home Menu

 





Are markets random?


Discussion in Traders Hideout

Updated
      Top Posters
    1. looks_one Big Mike with 10 posts (13 thanks)
    2. looks_two ThatManFromTexas with 10 posts (9 thanks)
    3. looks_3 Anagami with 8 posts (8 thanks)
    4. looks_4 monpere with 7 posts (11 thanks)
      Best Posters
    1. looks_one monpere with 1.6 thanks per post
    2. looks_two Big Mike with 1.3 thanks per post
    3. looks_3 Anagami with 1 thanks per post
    4. looks_4 ThatManFromTexas with 0.9 thanks per post
    1. trending_up 36,662 views
    2. thumb_up 91 thanks given
    3. group 15 followers
    1. forum 87 posts
    2. attach_file 11 attachments




 
Search this Thread

Are markets random?

  #11 (permalink)
 
ThatManFromTexas's Avatar
 ThatManFromTexas 
Houston,Tx
 
Experience: Advanced
Platform: NinjaTrader
Broker: Mirus Futures/Zen-Fire
Trading: TF
Posts: 2,265 since Feb 2010
Thanks Given: 1,206
Thanks Received: 4,348

To the uninitiated....



This market looks random....



But proper analytic indicators eliminates the noise....



Making traders happy...


I'm just a simple man trading a simple plan.

My daddy always said, "Every day above ground is a good day!"
Reply With Quote

Can you help answer these questions
from other members on NexusFi?
My NT8 Volume Profile Split by Asian/Euro/Open
NinjaTrader
ZombieSqueeze
Platforms and Indicators
Request for MACD with option to use different MAs for fa …
NinjaTrader
NexusFi Journal Challenge - April 2024
Feedback and Announcements
 
Best Threads (Most Thanked)
in the last 7 days on NexusFi
Retail Trading As An Industry
58 thanks
Battlestations: Show us your trading desks!
55 thanks
NexusFi site changelog and issues/problem reporting
48 thanks
What percentage per day is possible? [Poll]
31 thanks
GFIs1 1 DAX trade per day journal
29 thanks

  #12 (permalink)
 
Jigsaw Trading's Avatar
 Jigsaw Trading  Jigsaw Trading is an official Site Sponsor
 
Posts: 2,988 since Nov 2010
Thanks Given: 831
Thanks Received: 10,393


Big Mike View Post
Some have said that HFT is generating a lot of "noise".

Let me ask you: what is the difference between noise and randomness?

BTW, I believe markets are not random.

Mike

There is no such thing as 'noise' in the market.

There is just trading.

Visit my NexusFi Trade Journal Reply With Quote
The following 2 users say Thank You to Jigsaw Trading for this post:
  #13 (permalink)
 
ThatManFromTexas's Avatar
 ThatManFromTexas 
Houston,Tx
 
Experience: Advanced
Platform: NinjaTrader
Broker: Mirus Futures/Zen-Fire
Trading: TF
Posts: 2,265 since Feb 2010
Thanks Given: 1,206
Thanks Received: 4,348



DionysusToast View Post
There is no such thing as 'noise' in the market.

There is just trading.

I beg to differ....


I'm just a simple man trading a simple plan.

My daddy always said, "Every day above ground is a good day!"
Reply With Quote
The following 5 users say Thank You to ThatManFromTexas for this post:
  #14 (permalink)
 
Jigsaw Trading's Avatar
 Jigsaw Trading  Jigsaw Trading is an official Site Sponsor
 
Posts: 2,988 since Nov 2010
Thanks Given: 831
Thanks Received: 10,393


ThatManFromTexas View Post
I beg to differ....


I hope that was just for show.

If not, we are all doomed...

Visit my NexusFi Trade Journal Reply With Quote
The following user says Thank You to Jigsaw Trading for this post:
  #15 (permalink)
 
Jigsaw Trading's Avatar
 Jigsaw Trading  Jigsaw Trading is an official Site Sponsor
 
Posts: 2,988 since Nov 2010
Thanks Given: 831
Thanks Received: 10,393

When I say there's no noise, I think it's important to differentiate between 'random' and 'predictable'.

Something that is non-random is not necessarily predictable.

Noise is mostly referred to as 'one level lower than I look'. Well - I look at the lowest level - bids, offers and trades.

None if it is random, everyone trades for a reason. It's just that often it is directionless and unpredictable.

I like the analogy of people walking in a shopping mall. Most of the time, you could never predict where everyone will be in 15 minutes time. Then again, right the fire alarm and you'll be a lot more accurate in your predictions.

Watching the Tape/DOM, I don't see any of it as noise. I just see it as chaotic or not chaotic. As predictable or not predictable.

Perhaps it's just semantics. Still, I think the whole 'noise' term usually means - "you look at too low a timeframe - that's just noise"

Whereas the lowest timeframe - the Tape is something that can be used with success.

Visit my NexusFi Trade Journal Reply With Quote
  #16 (permalink)
 
GridKing's Avatar
 GridKing 
San Diego, CA USA
 
Experience: Intermediate
Platform: NinjaTrader
Trading: ES
Posts: 3,630 since May 2011
Thanks Given: 584
Thanks Received: 881

Random Walk versus a Non-Random Walk - This article describes the Random Walk Theory of financial markets and its counter part, the Non-Random Walk Theory

StockCharts.com - Simply the Web's Best Financial Charts

heading chart school

in table of contents

"Successful trading is one long journey, not a destination" Peter Borish Former Head of Research for Paul Tudor Jones speaking on conversations with John F. Carter
Visit my NexusFi Trade Journal Reply With Quote
The following user says Thank You to GridKing for this post:
  #17 (permalink)
 mrphr 
London
 
Experience: None
Platform: .
Trading: .
Posts: 255 since Apr 2011
Thanks Given: 65
Thanks Received: 182


ThatManFromTexas View Post

Making traders happy...


I like her.

Reply With Quote
  #18 (permalink)
 mrphr 
London
 
Experience: None
Platform: .
Trading: .
Posts: 255 since Apr 2011
Thanks Given: 65
Thanks Received: 182

If you believe markets are random; You will be fooled by randomness.

Reply With Quote
  #19 (permalink)
 
Big Mike's Avatar
 Big Mike 
Manta, Ecuador
Site Administrator
Developer
Swing Trader
 
Experience: Advanced
Platform: Custom solution
Broker: IBKR
Trading: Stocks & Futures
Frequency: Every few days
Duration: Weeks
Posts: 50,322 since Jun 2009
Thanks Given: 33,143
Thanks Received: 101,477


DionysusToast View Post
There is no such thing as 'noise' in the market.

There is just trading.

I completely agree. I don't agree with the person who said HFT is the root of all evil (paraphrasing), although you can check back with me in a few more years and see if I've changed my mind (the way we are heading).

But for lack of a better word, there is "noise" in simple terms. For example, if you are Buffalo hunting, and ants are crawling on your feet -- the ants don't really interest you but may distract you, thereby creating "noise".

A lot of people think they are hunting Buffalo, but their charts are aimed directly at the ants. For these guys, I always say their chart is too small (timeframe) and they can't see the bigger picture, and are getting whiplash from all the ants attacking them.

But to go to your point, I have never once looked at any of my charts and said "damn, the HFT bots!!!!". LOL. Perhaps the flash crash, but that is it.

Mike

We're here to help: just ask the community or contact our Help Desk

Quick Links: Change your Username or Register as a Vendor
Searching for trading reviews? Review this list
Lifetime Elite Membership: Sign-up for only $149 USD
Exclusive money saving offers from our Site Sponsors: Browse Offers
Report problems with the site: Using the NexusFi changelog thread
Follow me on Twitter Visit my NexusFi Trade Journal Started this thread Reply With Quote
The following user says Thank You to Big Mike for this post:
  #20 (permalink)
 
trendisyourfriend's Avatar
 trendisyourfriend 
Quebec Canada
Market Wizard
 
Experience: Intermediate
Platform: NinjaTrader
Broker: AMP/CQG
Trading: ES, NQ, YM
Frequency: Daily
Duration: Minutes
Posts: 4,526 since Oct 2009
Thanks Given: 4,167
Thanks Received: 6,018



monpere View Post
To the hourly chart trader, the 1 min is noise. To the yearly chart trader, the daily chart is noise. Noise is a market fractal level that is beyond what a particular trader's methodology takes advantage of. I trade what most typical traders consider noise. The difference is, there are patterns in noise, there are none in randomness.

I think it goes deeper than this. A roulette wheel produces patterns (series of Black/Red) which can easily trick anyone into believing they are frequent enough to take advantage of. The question you need to answer is what makes patterns different on the markets versus patterns created on a roulette wheel?

Here are 100 decisions taken from random.org where Black = -1 and Red +1. Can you see some recurring patterns similar to what can be seen in the markets? If you answer yes then what makes them different?


Reply With Quote
The following 5 users say Thank You to trendisyourfriend for this post:





Last Updated on May 23, 2012


© 2024 NexusFi™, s.a., All Rights Reserved.
Av Ricardo J. Alfaro, Century Tower, Panama City, Panama, Ph: +507 833-9432 (Panama and Intl), +1 888-312-3001 (USA and Canada)
All information is for educational use only and is not investment advice. There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
About Us - Contact Us - Site Rules, Acceptable Use, and Terms and Conditions - Privacy Policy - Downloads - Top
no new posts