My theory about forex market

[anpknioyoyo]

Good discussion on this particular thread.

Let me post 1 query to OP.

You say markets go randomly.

Now suppose for a minute that you're one of those institutional trader. You have a GAZZILION quantity of cash to move the market. Tell me how you'll make profits. What egy are you going to utilize to move the market to make a profit?

[VemoM]

If dice action is random, the price action will be random. But if dice action was random I would be dice action, thus price action cannot be random! You must be loaded dice action https://www.nigeriaforextrading.com/attachments/1529014597.png

but seriously, every roll of the dice gives you a 1 in 6 chance of rolling a particular number! In the long run, maybe 1000 dice rolls, the number 1/2/3 / 4/5/or 6 will appear closer to 1 in 6 times although It's random which number it'll be.

This is why, when you play roulette, the casinos like to show which numbers have shown up (and show them as red or black). If a player decides to bet according to what has occurred in the past, Oh, red showed up 4 times in a row so the spin has to be black. So the spin has to be red, or, Oh, red showed up 4 times in a row. NO.

For another spin, red will still have a 50% likelihood of showing up (not counting 0 and 00)

as for the FX market, the market moves in ways, that using a trading platform, perhaps you are correct 8 out of 10 times. Which 8 times out of 10 transactions are you going to be correct? The first 8 or the 8? That is what is random!

[Ajgm12]

Great discussion on this particular thread.

Let me post one question to OP.

You say markets go randomly.

Now suppose for a minute that you are one of the institutional trader. You have a GAZZILION amount of money to move the market. Now tell me how you'll make profits. What egy are you going to use to move the market to create a profit? Be the first to buy or sell if a new releases and hope that the rest of institutional traders do exactly the same but AFTER of me.

That, or having privileged info https://www.nigeriaforextrading.com/attachments/1529014597.png

[camlinocamola]

The forex market, as with all markets, isn't arbitrary. It is very unpredictable, but this is only because you are not controlling it. Random would suggest that there aren't forces out there that do control where the price moves. If you knew beforehand that the Australian central bank was likely to intervene, as they did a few decades back, sending the market crazy for some time, or that the BoJ was likely to intervene, you would place a trade and know very well where the market was going... at least for a brief time period. It's not arbitrary.

The markets are interrelated, and there's a reason why if the housing market collapsed in the united states, then elsewhere, the currencies behaved how they did. There's a reason why currencies are correlated with the movement of commodities and the stock market, or not. When you look at it, it isn't random motion, it is simply chaotic and unpredictable. This is particularly true the lower time period you exchange.

Only take solace in knowing that YOU know a pair will go up or go down, it is just a matter of if and how much.... Https://www.nigeriaforextrading.com/attachments/1529014597.png If entirely random, something may never go back down, or back up. We all know this isn't true. It's due to something ceasing to exist, which is also not arbitrary, As we all know that if something does go down rather than return.

[anpknioyoyo]

If you believe that it's random see below.

Currencies are influenced greatly by interest rates.countries with higher interest rates have stronger currencies and countries with reduced interest rates have poorer currencies.

Now take Aussie dollar(Strong) and Yen(Weak).

Look at the interest rate for Aussie dollar from 2000-2008

https://www.nigeriaforextrading.com/attachments/1529014603sds571957649.png

Today, consider interest rate for Japanese Yen from 2000-2008

https://www.nigeriaforextrading.com/attachments/1529014603sds1884011017.png

Today, what do you expect to the AUDJPY pair to do from 2000-2008, see the magical. .

Https://www.nigeriaforextrading.com/attachments/1529014603sds1153332206.png

Now, are you telling me that, that big uptrend is random? ...

https://www.nigeriaforextrading.com/attachments/1529014597.png

[Ajgm12]

The Currency Market market, as with all markets, isn't random. It is very unpredictable, but that is because it is not being controlled by you. Random would imply there aren't forces out there that do control at which the price goes. If you knew beforehand that the Australian central bank was likely to intervene, as they did a few decades back, sending the market crazy for some time, or the BoJ was likely to intervene, you'd put a trade and know quite well where the market was going... at least for a short time period. It isn't random....
When it has tendency, it isn't random. After reading s System I am starting to think that perhaps I had been wrong, but in the example of EURUSD I just see definited fad on monthy charts, below that it's hard to predict that the tendency, and possibly in the intra-day the price yes it is random most of time:

https://www.nigeriaforextrading.com/attachments/15290146041581505698.png

[Ajgm12]

I get it: Forex is a blend of trends on timeframes and randomness on timeframes, so all of us possess the reason! Do you agree?

[anpknioyoyo]

Jambo, my understanding is that when you're trading short timeframes, they're also affected by economic variables.

Now the price moves are made generally from the smart money, But what is this smart money? This is the money that comes from associations. Now the institutional trades must make their money. On what basis can they exchange? technical , fundamental or both. My guess is that they have a tendency to base their decisions on fundamentals and that is when your analysis is blown from the water, maybe not that specialized analysis was wrong. It was only that the big men decided to move the price according to their views of their currencies and technicals in no way can form the motion of currencies.

Hence the conclusion is that we must use both technical and fundamental analysis to base our trades. Most people use ONLY technicals and that is why they get in trouble. Do analysis after knowing the fundamentals.

Hope the experienced trades can share their views on this.

[agma69]

1 guy, or one institution moving the market???

Are you sure???

Would you know the size of this market???

Takes far more than that...

[Albempkgamgo]

1 man, or 1 institution moving the market???

Are you certain???

Would you know how big the market???

Takes way more than that... Depending on the market, a single person or institution can indeed move the market price.

There is this man in Europe nicknamed'The Flipper', he got that nickname because he scalped the Euro markets with huge positions turning leadership, short then long then short then. . .so on, seemingly his work schools found it bothersome as he literally was affecting market prices. In stocks when a single trading establishment makes the decision to offload risk and drops a massive supply of a certain stock off it is books, everyone will notice it and the price will fall both as a bigger supply of inventory has emerged and that the extra supply would be viewed as a negative sign on such inventory.

[vega1984]

Here is what I believe regarding the randomness of time frames as they are so called around FF.

In order to understand the time frames actually understand how you're chopping them.

An hour candle includes a usual range 29pips chances are that a normal hourly candle is out of 16-37 ATR, a daily candle has an average daily range of 120 and may normally exchange from 77-150 pips.

That which we just did there's we ARBITRARILY cut on the quotes bid/ask that always move up and down based on
1 liquidity
2 supply and need
3 orders transacted due to various analysis

(I'm getting tired of making the same points over and over, I might just re direct people to preceding posts)

the reason we do this is to get a sense of range, speed, momentum, and outliers.

The shorter time period we utilize to cut this into blocks the less range we see, the LESS WE SUMMARIZE the information. The longer we zoom out the MORE SUMMARY AND MORE RANGE for those quotes to be plotted.

In case you state smaller time frames are somewhat arbitrary and bigger aren't then you're assuming you're trading distinct markets. On the face of trading time frames that are greater with less movements, the benefits out weights the smaller time frames that are volatile.

Nevertheless this logic is specious.

The longer the time frame the MORE PREDICTING you're using.

So why not find the market for exactly what it is.


MACRO economic environment will dictate the incidence of transactions which will be made which then will be reflected statistically in your chart, now using the larger time frames to gauge direction and the time frames to affirm and time your entries according to this macro economic environment that is made by fundamental aspects.

However with the huge degree of unpredictability we can model our MONEY MANAGEMENT, AS IF the market was arbitrary.

[laumapkoxsvila]

personally here is what I think concerning the randomness of higher and lower time frames since they're so called around FF.

(I'm becoming tired of making the same things repeatedly, I could just re direct people to preceding posts) Perhaps that is due to not everyone accepting your point of view regarding the market.

[vega1984]

Perhaps that's because of not everyone accepting a point of view about the market. That's up for discussion, I am certain that many benefit from my remarks, if you're not among them you're welcome to stop reading them....or contribute something of value.

Your choice

[kikeompl]

The FX market is a bit like the weather, it seems to be arbitrary but it's not. Random, like time will be given by a roulette wheel, produce results - that the ball will land on every number an equivalent number of times. There's no guaratee that this may happen with 4X, that palying 4X is really playing a game of chance. In tems of purely numerical systems, it's easier to produce winning systems in an cashino if you do the direction will probably beat you up.

[moxio23]

This discussion is really interesting. It is like Efficient market hypothesis, or Keynes vs Hayek. Both sides have a point.

From the blue corner (Random market theory)

Well this could be true but you would need to provide scientific evidence to prove this, I haven't seen any. Let's pretend that the storyline is true, that the market is random. Well, traders will need to choose what value is. There is a good chance as long as the quantity traded by participants had an immediate effect on price, at any stage the random market will end being random. The point that the RMT's are attempting to create is that the market is rigged in reality that these currencies are moving . Well, there is a problem, first off governments and central banks can not risk this as the nations, imports and exports welfare is based on the currency. There is an argument that market action is random and can be volatility, as you intended, very similar to turning a radio down and up until it finally turns up. There is some anecdotal evidence.

From the red corner (Order from the madness )

This is also an interest argument. This obviously suggests that when the market genuinely responds to supply and demand principles traders will eventually negotiate to determine value based on their own endowment and requires from the market. The equilibrium of everyone will differ based on many factors. This will naturally cause rapid perception shifts as equilibrium changes based on type of trader trading, e.g. long-term trader and short-term trader not being busy at the exact same time. Central banks and other institutions are likely to impact currency value through hedging action and monetary policy action, such as interest rate climbs. Trade is also likely to create some kind of long-term directional effect, consider the Brazilian Real and Coffee... pretty strong correlation as Brazil is a major exporter Real vulnerability means Coffee vulnerability, higher Coffee prices means more demand for Real to buy the pricier crop, as demand for the crop declines so does the real. So long-term value of the Real could be heavily affected by Coffee in addition to interest rates. So this could indicate it impossible for the market to become random. RMT's can assert that the availability of ETF's and other vehicles are adding to the noise as the mind winds are a lot, and short-term motions can be computed to some amount of accuracy. It is more than likely that the market is likely made to a small group investors in terms very similar to your basket, so rather than waste time and energy making each and every market, why don't you just create the market for a basket by way of instance, AUD, NZD, Coffee, Oil all can get bought and sold as a single basket regardless of demand and supply from the short-term. This is the scary picture because this does not imply randomness it suggests the market is to get the minority which control the quantity. It is all an inside job.

The Winner

In reality both theories have legal points. Random market theory claims the market doesn't have any order so can not be traded with achievement. This is by definition false as there are living breathing rich bastards out of it and I'm one of them. So I can not support this concept. On the other hand order from the chaos men have to understand that there is a possibility that market movement is volatility and noise designed to create profits for intermediaries. At best the presence of other egies and ETF's may signify some resources are victims of resources making their existence a fake. This has wider geopolitical factors for example is the USD controlling all other currencies artificially? So it goes to ask bigger questions.

Now from a trading standpoint, derivatives such as Options could be your saviour. That way you can trade the short-term volatility. This is a good resource page to learn Options (Vanilla). Http://www.citymonopolist.com trading it's called, they have a totally free Options school.

[ALF1971abfg]

Forex isn't Random.
No Forex strategies are 100% accurate!
There are places you are able to make trades with high probability, with minimal risk. .

[Ajgm12]

My concept about FX is that nothing works , why?

Lets assume that for moving the FX market you need a significant account at a real ECN account, so there are just a few men who have this, moreover, FX market moves also because movements of stock markets and commodities markets.

Thus a man with a huge account in FX, stocks or commodities market warms up in the morning and see a new about some shares or about some nation, and then he makes the decision to buy or to sell, and then the market moves in one direction and tens of thousands of traders win or lose money.

At the other portion of earth another man wakes up and flip a coin toss, and then he makes the decision to buy or to sell, and the market moves again in one direction, and tens of thousands of traders attempt to describe using their approaches the market goes, but there is no reason, just the will of a couple men!

So... That is my vision about FX market, it is a completely random market, there aren't any methods, there are not any systems, you may just minimize your losses utilizing SLs and hope that if you have fortune that the price reaches your TP, that's all, this is the reality IMHO.

What do you think?

PS: sorry for the bad english...