Do you believe this forex market is random?

<p>Prices today are log norm distributed from yesterday. Efficient Market Hypothesis and secret members of the flat earth secret society conclude that forecasting is vain. Price history over a few days, weeks, months can however be used to infer/forecast today’s price. Persistence in trend. Some prices trend up, others trend down. Distribution of daily returns may still be somewhat random, but the skew is not. Improvement in fundamentals along with broader bullishness and buying pressure push stocks up. Deterioration in fundamentals, market apathy and long holders unloading push prices down. The precise mechanism of how it is done is still a mystery to any market participant to this day, but as clear as day to academics and rookies who have never traded a share in their lives</p>

<p>You have millions of traders each expressing an opinion on what they think the “correct” price of any equity at any given moment is or should be. How can that result in anything except random? It might as well be Brownian motion. The problem is that day traders think they can spot trends intraday, but what they’re trying to analyze is random noise, and studies done be me and many, many others indicate that’s a sure way to lose money. Swing traders fall into the same trap: their sample period is rarely long enough to be part of the trend. Long-term investors - with the emphasis on the term ‘invest’ - have the greatest chance of profitability over the long-term.</p>

<p><br>Price movements are driven by profits and cash flow for individual stocks, as well as expectations of future growth, which we learn about on a quarterly basis. The price movement of individual stocks are still considered to somewhat random on a daily basis, as groups of stocks (sectors) and larger groups (S&amp;P 500) show movements that are easily influenced by external factors such as interest rates, employment, economic growth, and political activities and even the weather. On any given day, it is difficult if not impossible to predict this, and so the overall market is affected by these random events or news. However many quantitative wall street firms attempt to formulate models that will predict the future movements of stocks or sectors. These work more on correlations than cause and effect. I think over a large enough time period, say 10 years, you could say that the total stock market is driven primarily by economic growth and profitability. It would not be random over a decade. But on a daily basis, it is very much random or irregular.</p>

<p><br>No. Price movements in all financial markets are driven by Smart Money algorithms. The algorithms move price based upon the order book of Smart Money and their business model. This movement maximizes their profit by trading “against” the majority of traders. The price appears random because it cycles up and down but all of the levels that the algorithms target are engineered.</p>

<p id="isPasted">The Forex market is not entirely random, but it can be unpredictable and subject to random fluctuations in price. The market is influenced by a wide range of factors, including economic indicators, political events, and investor sentiment, which can all contribute to fluctuations in price that may be difficult to predict.</p><p>However, while the market can be unpredictable in the short term, over the long term, trends, and patterns can emerge that traders can use to make informed trading decisions. For example, technical analysis can be used to identify trends and price patterns that can help traders anticipate future price movements.</p><p>Ultimately, successful trading in the Forex market requires a combination of technical analysis, fundamental analysis, and risk management strategies, as well as a willingness to adapt to changing market conditions. While the market may not be entirely random, traders must be prepared to deal with a degree of unpredictability and manage risk effectively to be successful.</p>