Many genius academics will tell you the markets are random. (NOTE: most of these academics also don’t have much money).

Traders will tell you there are repeatable patterns in the markets, in other words, there is no Random Walk Down Wall Street.

So which is it? Are there obvious patterns to the market movements? Or are they random? And what are the implications for your trading. These are the topics Darren and Walter look at in this episode.

Darren looks at how traders can make money from trading random charts. And Walter draws a connection between Gucci handbags and random charts in this episode.

http://media.blubrry.com/2traders/content.blubrry.com/2traders/2Traders_-_EP17_Random_Charts.mp3

Download (Duration: 21:28  / 24.5 MB)

In this episode:

01:56 – you can create random generated charts

03:37 – the hand bag analogy

04:52 – Benoit Mandelbrot

06:58 – obsessed with the random chart

10:12 – people tend to underestimate complexity

13:18 – something really critical

14:24 – does luck going to make you win?

17:30 – Monte Carlo simulation

19:25 – relationship between your stop loss and your exit

20:25 – you need volatility

Tweetables:

The most important place for luck in trading is in something that people don’t look at. [Click To Tweet].

If price stays in a very tight range consistently, then my particular method won’t make any money. [Click To Tweet].

In the end you’re going to end up trading your beliefs. [Click To Tweet].

Download The Full Episode 17 Transcript Here

Grab the Monte Carlo profit projection spreadsheet right here.

Darren: As long as price moves even if it’s not consistently moving in one direction then that’s an opportunity that my particular strategy will make a profit.

Announcer: 2 Traders, Darren and Walter, pull back the curtain on profitable trading systems, consistent money management, and profitable psychological triggers. Welcome to the 2 Traders Podcast.

Walter: In this episode of the 2 Traders Podcast Darren and I look at the randomness of the markets. Are the markets actually random and if so, what does that mean for your trading? Does that mean that you won’t be able to consistently find profits from the market? Or is it something that doesn’t really matter at all? Is there any evidence for the random movements in the market? Darren and I tackle this and more in this episode of the 2 Traders Podcast.

Welcome to the 2 Traders Podcast. I’ve got Darren on the line and Darren, it sounds like you want to talk today about something about the random nature o...