what would happen if all maket participants were omniscient?
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- There certainly is a Holy Grail!
That is not how the markets work!
There is supply (sellers) and demand (buyers) and each side will want the best price for themselves, so there will always be disparity, and the prices will never stand still.
The day the markets stop moving is the day there are no buyers or sellers!
if everyone finds a way to calculate the best market price, every time, what do you guys think would happen to the chart and price?
If this happens then the market concept will end, and you will see again barter system. But I will salute to your question and your free mind.
if everyone finds a way to calculate the best market price, every time, what do you guys think would happen to the chart and price?
The best entry price or the best exit price ?
Lets assume Both .
Lets assume 2 crowds , those who want to exit (already in) , and those who want to enter.
In such a senario the market would move between 2 prices like an oscillator.
Then you will discover that there are things which you had not previously thought of.
Things that go far beyond your current ideas or understanding of financial markets.
The answer is simple... theoretically speaking if everyone knew the perfect price then there would be no losers and no winners. The market would be 100% efficient and trading would be a zero-sum-game
There is NOT a BEST MARKET PRICE!
Now, to your question, what would happen if all the market participants would find the NON existent best price?
I will tell you what will happen.
If they found that the best (non existent) price is above the current price - then all participant would issue buy orders.
But no one would supply the sell orders, so there would be no deal. No trading at all, because the sellers want to sell only above the best price.
Lets say current price is 50, best price is 100.
The buyers issue buy orders. No one meets them, because sellers will come only when price would go to 101 and above (which will never happen).
So, the buyers will have to change their orders and modify the price, make it closer to 100.
they will try buy at 60 - and the spread would be 40 Dollars. The price is now: Bid 101 USD, Ask: 60 USD (spread 40 usd, 40 thousand pips).
Still no luck! no deal. The buyers will try to buy at 70, and so on. Until it is in best price - buyers buy at 100 sellers sell at 100.
No deal for you !!!! come back one year !!! The market will not move at all.
It's just nonesense, there is no best price. Stop theorizing.
thanks for answering folks, but that's not nonsense, a guy named Eugene Fama, says exactly what i answered, that the market is always right, like it is omniscient about the price itself, and he even won a Nobel prize proving it.
You should really dive in deeper that that.
There are so many other things going on, things that you are unaware of.
What if you encounter a shady broker that will make you lose?
Then you have calculated the best market price, but your still losing...
Wondering why...how...
And you opponent is winning.
Financial markets are the most corrupt business in the world.
Another example.
Someone has gathered enough capital to literally move markets.
Again here you are with your best market price, but this person will not let you have his part of the trade.
He will simply put in more capital and move the market the way he desires, or what is needed for him to make his profit.
Have you ever even thought about these things ? at all ?
At some point you will have to step out of your black and white world.
How many people do you think have enough capital to move market prizes ?
Can there be a relationship to the amount of people that are successful in financial markets ?
Ever thought about that ?
It's just nonsense, there is no best price. Stop theorizing.
You could take that Nobel prize and start smashing it on the BUY and SELL buttons.
Maybe you will learn a thing or two, or maybe even more.
market manipulation on forex doesn't make any sense, because for it to work, you would need only 1 huge mega player moving the prices, but on the world there are several huge players, so if one big player is moving
the prices to the wrong direction, to get profit from retail stoplosses, other big players will enter the market, and this first players will lose a lot of money. So no, forex is not corrupt, it's a big calculator of the prices on the right
price, according to the fractal theory, the market acts like 1 person, but 1 person with information collected from all the players, and it shows the right price every moment. So my question:
If the market is always right, on the right price, omniscient on the most possible way, how can one hit the profits if its just 1 person against a giant mega brain?
One can hit profits by hitting BUY or SELL.
Without that, one won't hit profits.
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