Thread: Why it is possible to predict price movement?

Originally Posted by ;

What a lot of new traders do not get is the notion of probability. Nobody knows what tommorrow will bring, all you can do is deal in probability. Your probability will be high that you make a transaction if you're good. Utilizing risk control you can give yourself an edge and make money trading.

I really like the people who say its not possible, they can scorn all they want. I believe I will post a few before the fact trades up only to show them how its done. I really do love a troll!


Mike Haran

troll seems to be the word of 2012 in this forum. And no, risk management alone does not offer an edge.

Originally Posted by ;

that I really like the people that say its impossible

nobody said it was not possible, it's simply impossible with any certainty, only chance. Ergo, it do not mean in the scheme of things, it's not what ought to be the only and first consideration!

Originally Posted by ;

Sometimes it's possible to forecast price movement to the pip, but just occasionally. Although there are traders on this community that can and do forecast price levels, they aren't always able to do it under all circumstances.

Knowing why and when price becomes predictible is an interesting topic. A better understanding of when a market may turn will allow a better estimation of price. Here I've demoned a swing that is reduced to low onto the eurusd on the weekly chart, it is possible to see that the reduced to low swing was timed on an 84 week foundation. Today...

Mike, I see your points....

But feel of seasonality/cycles within FX is unknown for me, I see the logic and reasons behind equity moves and business cycles (heating, growing, pullback) however in FX it is much more complex because really when trading FX market you are doing sth like comparative value trading like inside equities(long short hedge) because you have two resources(eur and usd) so that you need to examine the correlation between economic cycles allows say in EU and US, which can be extremely random (also the much more factors impact the exchange rate not just economic cycles, and they're changing punctually)

but I am not saying it cant be done and if you are doing so my hat off for you!

When someone without fx experience like buddies family asks me about the management of eurusd I always tell them that just prediction I do have is maximaly for next 2-3 times....for longer duration its very random from my view, particularly the most watched/traded pairs....currencies like PLN,HUF,NOK could be predicted with greater probability

in terms of
Mike

Ideally I've marked an area where I would be interested in buying the eurusd at the time zone indied. Should we exceed this punctually ie a longer proceed down then, its telling me that I should perhaps be searching for trades.

Originally Posted by ;

Preferably I've marked an area where I would be interested in buying the eurusd....

Sorry, are you missing? The trading journals segment is the way gt;gt;gt;gt;gt;gt;, or trading egies this way gt;gt;gt;gt;gt;gt;gt;

Hope that helps.

Short term, price is completely arbitrary....however long term I think price does become predictable

Originally Posted by ;

it is not possible to predict price moves. Then wallstreet would not have dropped during the burst of the housing bubble if it had been. And they're supposed to be professionals with endless amounts of resources.

Oh, I am not talking about forecast with 100% certainty. We know they're not 100%, although what I have attempted to mean is similar to saying that weather can be predicted by observatory.

Someone might have escaped in the harm of housing bubble, while greed might be in control of others.

Originally Posted by ;

Predicting price movement?

Do you mean some kind of volatility indior or do you mean predicting the direction price will go?

If the latter (direction) then nothing, trading relies on a (greater) probability of one thing occurring more than just another, that is it, that is the best we've. So far as predicting price direction nothing is a certainty and anyone who tells you otherwise is either a total newcomer or is trying to sell you something, either way prevent both!

Yes, I am talking about these later.
Why higher probability prediction is potential? Can you elaborate?

Originally Posted by ;

price movement is Random but the randomness generates some sort of order.

It's not possible to predict what one company is going to do, when they will get paid and shift to home currency.

It's not possible to forecast when and if a large or small spec will buy or sell.

But if you receive a crowd of MILLIONS of different people doing seemingly random items then you can GAUGE A TENDENCY.

Then you add to that the current macro economic environment, and also the EXPECTATION of future environment, and seemingly random individual transactions begin to own...

TENDENCY? Do you merely mean trend (or the inertia of motion)?

Originally Posted by ;

troll seems to be the word of 2012 in this forum. And no, risk control by itself doesn't give an edge.