FAQ -- General
What do you mean by "predictable" or "predictability" when you talk about forex?

Imagine tossing a coin which is slightly bent in a way which is known to you. The bend is almost unnoticeable but it does exist and this fact will become obvious after a long enough series of coin tosses, if you do the book-keeping accurately. Trading the markets with a good trading system is similar. The amount of predictability is small, making it justifiable for people who do not have access to an analysis technique of sufficient sensitivity to talk about "efficient markets" -- the markets indeed look "efficient" to their methods of observation. The fact of predictability only becomes undeniable after hundreds or thousands of "coin tosses" (trades).

The world economy is never in equilibrium. "I assume that markets are always wrong" said George Soros. A market actor (investor, trader, central banker) requires finite time to analyze the changing environment and to make a decision. Yet more time and resources are needed to turn it into action visible by the market. No analysis is perfect, and some are less perfect than others. In addition, people who share common educational and cultural background tend to make similar, rather than the most efficient, decisions. Groupthink exists inside communities and large organizations. For these and other reasons, the so-called market inefficiency exists. Once the market inefficiency is quantified, predictive power (and a winning strategy) is only a step away, since such inefficiency -- always specific and quantifiable -- is in some sense but a deviation from the perfect symmetry which random noise (aka "efficient market") would possess.

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Last Updated on Saturday, 25 October 2008 15:59
 
What will happen if the amount of money controlled by the traders following your prediction becomes large enough to sway the markets ?

Although we do not expect this to happen any time soon, we can discuss it hypothetically, as an interesting thought experiment. The market should evolve towards losing inefficiency detectable by our technique and becoming "random" from the point of view of our way of quantifying market efficiency. After some time of observation (needed to make a statistically significant conclusion), our analysis will detect the lack of inefficiency and we will have to discontinue the service. If it's any comfort to the reader, we will make every effort to make sure our service fees are high enough and the services are secure enough to prevent this from happening.

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Last Updated on Saturday, 25 October 2008 16:01
 
What are the goals of the project?

Our primary goal is to maintain a public information service providing financial markets forecasts, based on our proprietary forecasting tools: an automated trading system -- a Forex Automaton™.

Our secondary goal is to discover, quantify and monitor the very existence of sustainable opportunities for profit-making via systematic trading. Or simply put, to monitor the degree to which these markets are more predictable than a "fair game" -- to a trader without access to insider information.

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Last Updated on Monday, 02 May 2016 12:07