Why should we assume that there are processes to facilitate the value differential. External factors may appreciable change the value of one pair relative to another. Traders and big money may do this as well. What if the internal processes of the market are doing something else. What one might assume is that they are always doing this.
Meaning cohesion is a random event, caused by random sync. Creating perhaps a sudden trend, a feature of forex, one reason why programs are useful as they can capture these with facility. Would this differ from a structure growth trend. I might suggest these are caused by the internal processes of the market itself. That is the structure of these processes has become compiled as growth itself.
So growth in forex is precisely the growth of long term structure. I might suggest that even this dissipates and reforms. So where is the persistence. Is this like a computer program or something like the way information may persist through a singularity.
That is the information content exists because of vast iterations over enormous times. But where would this be in markets. In possibly what high speed trading looks at. Again this level of detail is perhaps the internal processes of the markets at work.
High speed trading is agnostic to direction formation in a sense (thus speeding over the random nature of this formation), it just wants a structure to work with, which means it may be suited to the formation and dissipation of internal process, but suggesting that forex process does not care about direction either. This is a matter of interest to traders trading on the market as well, as this may tend to collapse to looking for the same detail high speed trading does.
The first analytic on my function trading page on this site is based around this, my sense of this is that to be consistently profitable one needed a bias into the market and to be trading when this happened and to know it was happening, which gets us into programs again.
But as I noted before in theory the human trader has an advantage as long as they do not collapse their trading to a facsimile of high speed trading by following a rigid rule set. It is a facsimile because one does not have the advantage programs have of no emotions, no need for rest and unwavering attention.
But I might add the human trader may want to hold on to these as they are part of cognitive action and therefore possibly of problem solving and learning, which is what trading on the market is one hopes a process of.
That is one assumes there is anything to learn in the formation and dissipation of structure, that is this process itself may be random, in which case there is nothing to learn except how to gamble on it, which does not seem to be effective on this market.
The answer to some of this is whether trading on the market as a human on such structure formation has less drawdown than programs, but still manages to keep a profit coming in.
How does this differ from process in equities. The growth in equities is perhaps directed by companies directed towards equity expansion. But these expansions tend to be based on future predictions of equity growth.
These predictions dissipate as well and reform, but with less facility than forex growth. Which is one reason why forex may be more reliable, if one can trade on no assurance of long term directionality. That is forex, one acknowledges the retracement.
Can one see an advantage in equities to the reign of the retracement, which has been a feature since at least the crisis. Can one assume these long term growth process do not exist. They do, it is just they are not being valued by the market, either because they cannot be, as some feel, or because the internal valuation processes of the market cannot do this.
So can the equity market value them, or is is perhaps that the market is generating ways to value them. How could one value tech. It is flash growth, based around flash moats which dissipate.
Those little start ups express this well, they are little spurts of growth, most of which evaporate, but as an aggregate they make a market of potential growth companies in the true sense of the word, company growth itself, pure growth, which retraces, but in doing so can create giants, which now even exceed oil companies.
This is not being directly valued by the market, but it is future growth itself and that is something the market has presumably compiled in its valuation of the companies listed therein.
But can forex retacements reference value. Fundamental and technical analysis attempts to do this. The first tries to find the input of external valuation into the market, the next attempts to see the appearance of flash valuation differentials.
It suggest that technical analysis would be more successful in forex. But only if this analysis is grounded in the processes of the market. Exactly, as noted, this means that one must use technical indicators like instruments examining phenomena, that is not as some kind of expression of prediction, which is not necessarily in forex. That is it may be in equities, especially long term, where many of these indicators come from.
Meaning these indicators are highly compiled instruments of prediction, given certain conditions. But meaning as well that compilation may be evaporated if it ever exists at a given time in forex, that is the issue of learning in this market.
So can one use indicators if one looks for times when forex is like the equity market, specifically when is it made like the equity market by vast changes in the equity market (crises, mini-crises).
Well, that is what I was looking for in the crisis and it seemed like this was the case. But those plungers of valuation do not go directly into the forex market, there is a strong barrier to information passage there, perhaps itself caused by the evaporation of process.
That is when the forex market is like the equity market, it is like the equity market in terms of directionality of valuations over relatively longer times than normal, but these are so unlike the normal valuations processes of this market. As noted they include such events as RSI divergence appearing to have a non-random predictability.
However they depended on events in the equity market that were random, but just the vast effect of money flow made more persistent than usual. It was not the case that a huge change in equity valuations would show up in the forex market (the predictability issue), the changes seemed to be at the level of process itself, that is the way the market valued (as indicated by RSI divergence perhaps). That is my interpretation now of what I dealing with then.
But there may be a way to get at valuations from the aggregation of high speed process, which may be something a human trader can note and learn, but may as well help determine those value differentials. There is no question in forex of profitable value differentials, this is its great attraction from past charting data, but the question is the non random nature of when.
But that question raises the question of how, if one want to try and get away from trading on the appearance of past structure, and assuming when from the structure of this structure or taking drawdowns.
In equities that when is taken care of by how being answered by time and directionality, neither of which one has in forex (one cannot assume temporal stability and one cannot assume directionality). One cannot assume process stability either but one does note the formation of stable process over charting data that is not at very short time frames.
Again, this is the attempt to bring that temporal stability into forex, which can exist with equities. But the difference is that the structure which forms in a stable way is random. That suggests the need for human ways of focusing on markets.
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