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The Seeming Randomness Of Market Action

By Macro Man on May 19, 2009 | More Posts By Macro Man | Author's Website

Another day, another trip through the grist-mill of seemingly random (and certainly erratic) price action. In some ways, it doesn’t seem to matter if you are bullish or bearish; if you’re trading tactically, it’s very, very easy to get caught out by the seeming randomness of it all.

So easy, in fact, that Macro Man wonders if it is even possible to tell the difference between current price action and a random number generator. So he’s determined to find out.

There are six charts below. Three are actual financial market prices, and three are the product of the random number generator function in excel. Your mission, should you choose to accept it, is to determine which three are real….and which three are the figments of Bill Gates’ imagination.

Good luck.






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1 Comment :
Comment by Kiwi
2009-05-19 05:00:39

The hourly chart for GBPUSD looks like the crankshaft out of a crazy car, nothing human about it.
Bloomberg would have us believe the risk appetite of the Watanabes is to blame for everything.
Either the Watanabes have severe neurological disorders or Bloomberg can make no sense of anything, like the rest of us.

The idea of having to fully hedge a set of trades that are badly underwater is not an appealing one when random outcomes are what you get. It is a mind ****.

I’d guess that C + D are random but thats only because 3 random numbers should not give a straight line, so curves are the only clue.

 
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