This is what makes dynamic market systems so difficult to predict. Because we cannot accurately describe the current situation band because errors in the description are hard to find due to the system's overall complexity, accurate predictions become impossible. A number of thoughtful traders and experts have suggested that those trading with intra day data such as five-minute bar charts are trading random noise and thus wasting their time. Over time, they are doomed to failure by the costs of trading. At the same time these experts say that longer-term price action is not random.
Traders can succeed trading from daily or weekly charts if they follow trends.
As it turns out, such a paradox can exist. A system can be random in the short-term and deterministic in the long term. To simplify the situation, let s begin by discussing mathematical dynamical systems, a very simple abstraction of the kinds of dynamical systems that arise in nature. Well, among the simplest mathematical dynamical systems are the so-called Iterated functions. Start with any mathematical expression, for example the square root function and start with any number, say x .