Some Market Wit
These were extrated from emails to FOREX traders.
Whatever rules you devise, at the end, the
cruel law of probability will kill any hope of profiting on perfect
randomness. It is true that wining little happens more times that losing big
and this may give the illusion of a wining system, but at some point you
will hit a loss that will balance out all previious winnings with a
I can understand the occasional slot-machine
or roulette gambler, he knows the odds are against him, but he is hoping to
win and walk away. Now, with the exception of poker, a game in which skill is
involved, no one can make a living on gambling against the odds.
Market Inertia was a strong trend of thought
among the early Market Analysts and if you Google up “Market Inertia” you
may find some out there
still pushing the concept. It took us several months to
realize that we were going nowhere with this approach and that it was as
much BS as Fibonacci, the neural system and the sort. There’s no such thing
as market inertia, no point in surfing the market
There’s no average profit in randomness.
Prices are manipulated during anything that
is scheduled, in order to profit you must guess the unexpected..
Stoping the trades for any period of time to
resume later on, can’t alter the odds at all. What difference could it make
to stop for the rest of the day, the rest of the week, the rest of the month
or even trade right away; the market can’t distinguish those periods. Maybe
your random walker is actually Johnny Walker
There’s no smart way for playing slot
machines, in the average you will certainly lose, no one can make a living
playing slot machines.
Any real statistical edge that you think you
just found, has probably been found by plenty of other operators already
strugling to make profit out of it. Even if you are so smart and lucky as to be
a first, it won’t be for long. So, in any case, all you can look forward to
is a slice of the pie that may not necessarily be enough to pay for the
An algorithm that can make a profit in the
average event does not imply that it can make a profit in the average. This
should be engraved in stone somewhere…
The market learns, nothing stays profitable
for a long, as soon as operators start profiting on some effect, the rest
will follow smothing it out until it disappears.