Hi all :),

sorry for my poor English. I’m new to FX trading. I’m a telecom engineering student and while trying out a couple demo accounts, I tried to put my mathematical analysis / probability / signal theory notions to good use and elaborate a mathematical model which I could later use to create a reasonable strategy for a mini live account.

Given the huge amount of money traded (which should make it very hard for anyone or anything to influence the market directly), has it already been considered to model FX trends with a random walk, at least on a sufficiently wide time scale? Combined with the stddev indicator tool which I’ve seen on some trading platform, I think it could provide an excellent basis for a model.

I tried to build a very simple strategy built on this model, and I got a 95% success rate (although I’m calculating this just on the 20 trades I made so far after elaborating the model, which [B]can’t[/B] be statistically significant – but it’s still encouraging). The catch is that when I lose, I lose much more than what I profit on the average trade.

So anyhow, back to my question: do you think the random walk model is a valid one? What are other valid mathematical models?

Thanks,

Dario