ea classic question and my answer
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2. is market can calculate? : this is why we need ea because we think it can calculate right? but in my opinion , market should be 95% time random and 5% time can calculate( relate to news),if you think 5% is 5 minutes then 95 % mean 95 minutes is random , if you think 5% is 5 hours then mean 95 % 95 hours is random , that mean we real finally need to face is random and not really calculate thing, that is why if you thing the market is random , it will look like more easier to develop ( like Martin)
EAs are in my humble opinion superior to manual trading because they take the emotional element out of trading and if well programmed can indeed make pretty accurate calculations. Regarding the topic of randomness: I recently had a discussion about this with someone in this thread: https://www.mql5.com/en/forum/432327#comment_42415595
My conclusion was that there really is no randomness. What we humans call "random" is simply a misnomer to explain away processes that we cannot yet understand. People are quick to use the word "random" for patterns they fail to see, but that doesn't make it random. It simply means that those who use that word have failed to recognize the pattern.
- 2022.09.09
- www.mql5.com
EAs are in my humble opinion superior to manual trading because they take the emotional element out of trading and if well programmed can indeed make pretty accurate calculations. Regarding the topic of randomness: I recently had a discussion about this with someone in this thread: https://www.mql5.com/en/forum/432327#comment_42415595
My conclusion was that there really is no randomness. What we humans call "random" is simply a misnomer to explain away processes that we cannot yet understand. People are quick to use the word "random" for patterns they fail to see, but that doesn't make it random. It simply means that those who use that word have failed to recognize the pattern.
Let me put this in a different way and then you'll perhaps understand what I'm trying to say: if the markets were truly "random", in other words if there was no reliable pattern that could be exploited, then no multibillion dollar hedge fund or investment bank would even put a single dollar into those markets. I worked in a medium sized investment bank for a good number of years and was in charge of both evaluating trading systems, as well as preparing financial statements pertaining to the foreign exchange department I worked in. A large portion of the income that is recorded in the "other assets" section of the balance sheet is composed of foreign exchange transactions. This would not be the case if the markets, especially the FX market and derivatives markets in general, were random as chaos (in the sense people understand and use that term) cannot be reliably used to profit.
The banking system, especially the investment banking system is not only subject to very rigorous regulation that determines under which circumstances they can put funds into which assets for how long, but have also become tremendously risk averse over the years. The senior management, risk assessment department (we jokingly referred to them as the "no-guys") and compliance officers wouldn't even dream about putting a ton of money into such a venture if the markets were random. They might as well go into a casino and try their chances there if that was the case. They wouldn't put hundreds of millions of dollars into R&D in order to headhunt the absolute best, world-class mathematicians from elite universities like Yale, Oxford and Harvard to develop quant algos that scan the markets for repeating patterns. We had one such remarkable genius from Yale whose mathematical research revealed an algorithm that after extensive Out-Of-Sample testing was implemented into a high-frequency trading robot. The algorithm was so complicated that none of us really knew how it worked, but it worked nonetheless.
What I'm trying to convey here is that big money doesn't waste their time, energy and resources with stuff that doesn't work or is uncertain. My supervising manager was always very careful when I or anyone else came up with a new trading system, wanted to see test results and discussed the matter for lengthy amount of times with both the senior management and our high-net-worth clients before giving us the nod to trade.
Let me put this in a different way and then you'll perhaps understand what I'm trying to say: if the markets were truly "random", in other words if there was no reliable pattern that could be exploited, then no multibillion dollar hedge fund or investment bank would even put a single dollar into those markets. I worked in a medium sized investment bank for a good number of years and was in charge of both evaluating trading systems, as well as preparing financial statements pertaining to the foreign exchange department I worked in. A large portion of the income that is recorded in the "other assets" section of the balance sheet is composed of foreign exchange transactions. This would not be the case if the markets, especially the FX market and derivatives markets in general, were random as chaos (in the sense people understand and use that term) cannot be reliably used to profit.
The banking system, especially the investment banking system is not only subject to very rigorous regulation that determines under which circumstances they can put funds into which assets for how long, but have also become tremendously risk averse over the years. The senior management, risk assessment department (we jokingly referred to them as the "no-guys") and compliance officers wouldn't even dream about putting a ton of money into such a venture if the markets were random. They might as well go into a casino and try their chances there if that was the case. They wouldn't put hundreds of millions of dollars into R&D in order to headhunt the absolute best, world-class mathematicians from elite universities like Yale, Oxford and Harvard to develop quant algos that scan the markets for repeating patterns. We had one such remarkable genius from Yale whose mathematical research revealed an algorithm that after extensive Out-Of-Sample testing was implemented into a high-frequency trading robot. The algorithm was so complicated that none of us really knew how it worked, but it worked nonetheless.
What I'm trying to convey here is that big money doesn't waste their time, energy and resources with stuff that doesn't work or is uncertain. My supervising manager was always very careful when I or anyone else came up with a new trading system, wanted to see test results and discussed the matter for lengthy amount of times with both the senior management and our high-net-worth clients before giving us the nod to trade.
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