Are forex rates predictable?￼
Are forex rates predictable ?
A good thesis from a Phd Student at the University of Raymond Lulle in Barcelona (Catalunya) about this question “A CONTRIBUTION TO EXCHANGE RATE FORECASTING BASED ON MACHINE LEARNING TECHNIQUES” try to answer to part of the question. (https://www.thirdbrainfx.com/wp-content/uploads/2021/04/SANABRIA_PhD-Thesis_Versio-Defensada.pdf)
In Forex Trading, we are “influenced” by a known theory of the “random walking” that states that finally we can’t state nothing and rates are not predictable but this thesis try to advance with SVM (Support Vector Machine) technics related to machine learning.
The non-linear visible problem – just look at this FX rates curves- and you know you don’t have to study statistics during years to see that modeling is quiete problematic.
After 10 years producing robots for Forex market, i am convinced that we are losing time to ask if forex rates (or any stocks by the way) are predictable or not.
There is finally no “interest” on that because the answer will be always a losing model after after a while and we will discuss hour and hour abour margin errors.
The interest is more on the decision making : why we are taking a decision to buy or sell, what are the hidden and clear reasons we are making a decision to invest, to close a position etc…some brillant mind in the past had already this feeling that the sum of the individual decisions make a global stream. A global “social stream”….and perhaps the best investors as well the best traders are the ones able to catch this social stream you can see in the chart, now. It’s not , then, a question to predict rates but to the take the river like you would do with your boat trying to float first and make decision all along the descent.