If you don't believe that we can predict potential outcome with different probability, then you believe that the market is efficient, following the random walk theory, and then there is no point analysing it (or neither trading it)
Do you really believe you can predict the market? Then tell me exactly at what price will BTC be on November 6, 2017.
How can anyone predict the markets when there are real world, random variables always at play here.
It could be another exchange getting hacked, or China finally banning Bitcoin or a comet hitting the Bitmain mining farm... It could be anything really. The best we can do is limit our risk and maximize our returns based on the size of our bankroll, the price movement and the volatility.
Edit: Can you please explain the efficient market hypothesis and the random walk theory and its inverse correlation with market prediction? I would love to be educated in such matters since you're so smart. Thanks.
Fair explanation in here.
Can you explain it in your own words? I was hoping you would clarify further how the efficient market hypothesis and the random walk theory has an inverse correlation with market prediction. That would really be appreciated. Thanks.
Regarding sentence in bold, those action have an impact on the price, if it is big enough that the "noise" cannot hide it, then you can trade on it. for the bitmain mining farm, since it's an exogenous variable and totally unknown to the market, you can't do anything.
So are you saying that there are only certain variables that directly affect the price of Bitcoin that you can act on or trade? How can something like a Bitmain mining farm going down be unknown to the market when it has something to do with what makes Bitcoin secure? I'd say it would really affect the Bitcoin market in a big way. And knowing how irrational most people are, there will be dumps galore happening.
A strong efficient market hypothesis (one in which there is not point to analyse the market to profit from it) is a market where all information are already priced in. Thus the price "randomly" variates around its fundamental values. In this case there is no point to predict market since, when trying to predict market variation, people are assuming the market is not strongly efficient, and not all information are priced in. The only thing you can do is buy and hold, not trade on any indicator.
Speaking about your second point, the bitmain mining farm would certainly had price impact on the market before it happens, since "insiders" (let's call them this way) will short the market massively. Nonetheless, we were there speaking about a comet destroying this farm, and there is no way this news can not even a tiny bit incorporated in the market since this event is not know to anyone before hands. and yes, it would affect the market in a big way. (to give another similar example, brexit, since most people didn't believe in it nor knew how to price it correctly strongly affected the price afterwards without giving signal beforehands). i hope its clear enough
there are lots of paper and books on that if you want to deep further in.
