Do you believe in the fractal nature of the stock market?

[kut2k2]

Of course there are similarities across time frames BUT:

I doubt that many here have any precise idea what a fractal actually is, beyond the vague intuitive statement of the OP. Can any of the proponents of the fractal nature of price charts determine the fractal dimension of the S&P500 price history? In order to convince me of what you claim you need to supply a more scientific argument.

Any similarity of price chart time frames to fractals seems to be entirely in your own minds due to your own biased thinking and susceptibility to accept unproven ideas. Much like the way some people believe that ancient Egyptions used electric light bulbs.

This is what a real fractal looks like, the depth is infinite with the same patterns recurring unlike on a price chart.
http://www.jakebakermaths.org.uk/maths/mandelbrot/canvasmandelbrotv12.html

The markets are pseudo-fractal or fractal-like. The closest analogue would be the coastline "fractals" which, like the markets, are nonrepetitive but similar. Of course the biggest difference is that the markets have a smallest size. There is no scale smaller than tick-size. Still there may be something about fractal math that is applicable to markets. Mendelbrot thought so.

 

[J_Smith]

I'm sure you guys heard of Elliott Wave Theory.

" ...
Elliott's theory is somewhat based on the Dow theory in that stock prices move in waves. Because of the "fractal" nature of markets, however, Elliott was able to break down and analyze them in much greater detail. Fractals are mathematical structures, which on an ever-smaller scale infinitely repeat themselves. Elliott discovered stock-trading patterns were structured in the same way.

Market Predictions Based on Wave Patterns
Elliott made detailed stock market predictions based on unique characteristics he discovered in the wave patterns. An impulsive wave, which goes with the main trend, always shows five waves in its pattern. On a smaller scale, within each of the impulsive waves, five waves can again be found. In this smaller pattern, the same pattern repeats itself ad infinitum. These ever-smaller patterns are labeled as different wave degrees in the Elliott Wave Principle. Only much later were fractals recognized by scientists.
..."​

To all, in relation to trading - what is the most relevant piece of information you take from this very good documentary - you have to watch the whole episode, which I think is well worth watching.

J_S

 

[dartmus]

The markets are pseudo-fractal or fractal-like. The closest analogue would be the coastline "fractals" which, like the markets, are nonrepetitive but similar.

The repetitive logic within the robotic logic circuits of machines continually applying their edge is responsible for the only possible non-random (fractal) component of price. Price is fractal only because logic is fractal. Price is fractal only to the extent the best logic works on all timeframes. The non-randomness of markets is a byproduct of consistently applied persistent logic.

The rest of the randomness can't possibly be fractal. Even tho random data like what can often be found in price coincidentally exhibits similar looking features to non-random data ...it's not created by logic or constrained except where it triggers the action of rule based traders.

NON-discretionary traders exist on all timeframes and often consider a spectrum of timeframes before entering or exiting.

 

[Turveyd]

I'm sure you guys heard of Elliott Wave Theory.

" ...
Elliott's theory is somewhat based on the Dow theory in that stock prices move in waves. Because of the "fractal" nature of markets, however, Elliott was able to break down and analyze them in much greater detail. Fractals are mathematical structures, which on an ever-smaller scale infinitely repeat themselves. Elliott discovered stock-trading patterns were structured in the same way.

Market Predictions Based on Wave Patterns
Elliott made detailed stock market predictions based on unique characteristics he discovered in the wave patterns. An impulsive wave, which goes with the main trend, always shows five waves in its pattern. On a smaller scale, within each of the impulsive waves, five waves can again be found. In this smaller pattern, the same pattern repeats itself ad infinitum. These ever-smaller patterns are labeled as different wave degrees in the Elliott Wave Principle. Only much later were fractals recognized by scientists.
..."​

Wave only work, after the fact, ZERO predictive value, so guess we can ignore all of that sorry!

 

[J_Smith]

 

[J_Smith]

 

[Mysteron]

 

[J_Smith]

If the video is blocked MN, you should find it on youtube, as there are a few good documentaries there bout same. Mr Brown is a very clever person and would make a great pope

As for Da Vinci, it appears he used one side of his brain more than the other, which explains why he was what he was !

J_S

 

[J_Smith]

Wave only work, after the fact, ZERO predictive value, so guess we can ignore all of that sorry!

I would not go that far, as the very clever people who code the algos and such, can only work from a base of what is made available to them!

To close your mind, is to make yourself blind.

J_S

 

[J_Smith]

The repetitive logic within the robotic logic circuits of machines continually applying their edge is responsible for the only possible non-random (fractal) component of price. Price is fractal only because logic is fractal. Price is fractal only to the extent the best logic works on all timeframes. The non-randomness of markets is a byproduct of consistently applied persistent logic.

The rest of the randomness can't possibly be fractal. Even tho random data like what can often be found in price coincidentally exhibits similar looking features to non-random data ...it's not created by logic or constrained except where it triggers the action of rule based traders.

NON-discretionary traders exist on all timeframes and often consider a spectrum of timeframes before entering or exiting.

"A fractal is a never-ending pattern. Fractals are infinitely complex patterns that are self-A fractal is a never-ending pattern. Fractals are infinitely complex patterns that are self-similar across different scales. They are created by repeating a simple process over and over in an ongoing feedback loop. Driven by recursion, fractals are images of dynamic systems – the pictures of Chaos. Geometrically, they exist in between our familiar dimensions. Fractal patterns are extremely familiar, since nature is full of fractals. For instance: trees, rivers, coastlines, mountains, clouds, seashells, hurricanes, etc. Abstract fractals – such as the Mandelbrot Set – can be generated by a computer calculating a simple equation over and over.similar across different scales. They are created by repeating a simple process over and over in an ongoing feedback loop. Driven by recursion, fractals are images of dynamic systems – the pictures of Chaos. Geometrically, they exist in between our familiar dimensions. Fractal patterns are extremely familiar, since nature is full of fractals. For instance: trees, rivers, coastlines, mountains, clouds, seashells, hurricanes, etc. Abstract fractals – such as the Mandelbrot Set – can be generated by a computer calculating a simple equation over and over."