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Are markets fractal?
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Are markets fractal?

  #31 (permalink)
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Markets are fractal .why ?

because the human mind is fractal & human mind makes the market .
fractal is defined by two properties : 1- self similarity 2- independent of time frame

consider if you were a kid and a you encounter a dog attack , even 20 years later ,when ever you see a dog , you will be fearful .in this case you repeated yourself behavior in a different scale.still you have fear about dog but maybe not as much as past.

in markets,exactly the same scenario occurs.when a price rallies or moves down the overall group memory will record
that point and i the future (in another scale) ,it will repeat that behavior.

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As you can see this is monthly chart of S&P500 in recent 25 years .any pullback represents change of psychology
of market and even a decade later the same behavior repeats in the market .

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  #32 (permalink)
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As a trader of Harmonic Price Patterns I am a firm believer that markets are fractal. Very often I will observe say a bearish pattern on a large chart that needs to rally in order to complete which is confirmed by a bullish pattern on a smaller chart. On many occasions the move in question will be precisely between the levels identified by the short term and long term patterns. Of course this is just my experience, I think the question is subjective.

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  #33 (permalink)
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DarkPoolTrading View Post
Yip.

Perhaps post some charts if you feel otherwise so we can discuss.


Funny enough Lewis Borsellino showed this in one of his live webinars on TOS. Can' recall time frames now, but it was something like a 60 min vs a 5 min. When he placed them side by side they were exactly the same. Don't quote me on those time frames as I can't be sure what they were now.

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  #34 (permalink)
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Commodity View Post
Markets are fractal .why ?

because the human mind is fractal & human mind makes the market .
fractal is defined by two properties : 1- self similarity 2- independent of time frame

consider if you were a kid and a you encounter a dog attack , even 20 years later ,when ever you see a dog , you will be fearful .in this case you repeated yourself behavior in a different scale.still you have fear about dog but maybe not as much as past.

in markets,exactly the same scenario occurs.when a price rallies or moves down the overall group memory will record
that point and i the future (in another scale) ,it will repeat that behavior.

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).


As you can see this is monthly chart of S&P500 in recent 25 years .any pullback represents change of psychology
of market and even a decade later the same behavior repeats in the market .


Agreed, crowd behavior of fear and greed is the same graph repeating over and over. John Bourgeal calls this behavioral modeling.

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  #35 (permalink)
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DarkPoolTrading View Post
Insightful. Do you plan on elaborating?

It is a tough question considering Mandelbrot and cotton prices with the development of fractals.
I would agree with the no side though.

Ultimately, a fractal is a simple deterministic equation that produces complex patterns when plotted for visual representation.

Markets are complex stochastic process that produce simple patterns when plotted for visual representation.

I would think the best test of this idea though is if the markets are fractal then we should be able to create trading strategies based off the equations. That idea does not really make sense though because of the simplicity of the equations and the lack of randomness.

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  #36 (permalink)
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Amazing, Autotuning Sandpiles Show Remarkably Complex Behavior

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  #37 (permalink)
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No Scientist here but....

My guess is how you use the definition of what is 'fractal'. I thought simply put that a fractal was a repeated pattern; so perfect in its repetition that it can be predicted in the future, with 100% certainty. Market charts contain repeat patterns but is the market itself , the underlying, a fractal? Or are portions of the charts it produces from past data just contain fractals? We might be able to predict that someone who was attacked by a dog will be fearful when he encounters a dog, but can we predict when he will encounter a dog, and how often? The only way we can recognize a pattern is to see it from a distance hence, seeing them in a snowflake. Perhaps if we had the capability to know all the information that affects the markets - all price action, all news, all sentiment, all human response at once perhaps we would see a fractal in that and be able to predict the market future 100%.

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  #38 (permalink)
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The question isn't if the market is a fractal, everything is a fractal to some degree. The question is if money can be made with some degree of regularity using fractal analysis. Yes, you can see many fractal structures in hindsight, but how useful are they in the "now"?

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  #39 (permalink)
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I can say with complete certainty that markets are fractal. That's how my fascination with price started. If you don't know that yet, you haven't been looking hard enough.

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  #40 (permalink)
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If one adheres to the self-similarity criterion, then no. If one doesn't, then the market can be whatever the observer wants it to be.

The more important question is whether or not the market cares about what the trader wants.

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