Fractal nature of stock market...
- Thread starter gettinglucky
- Start date
You are pushing your luck
My approach is very different from this and so are some of my conclusions but years back it provoked my thinking. Perhaps it will yours.
http://ermanometry.com/articles/log_spirals_in_the_stock_market.php
Last clue: What moves your chart to the right is crucial in how it controls all movement. So what is commonly referred to as PA is actually Time Action. Let's say we have a time period of consolidation. The Time chart looks boring with little volume and a continuous linear move to the right. The Volume reader sees the same thing but the rate of movement is different because he is observing space time. The Range Chart is really price action and doesn't move to the right but under this single bar there can be very significant volume accumulation telling the next direction.
All the traders draw trend lines that occupy space and time. The Time chart pushes the trend line way to the right. The Volume chart less so and the Range chart least of all.
Now what will happen when price hits the trend line on each chart? It can be equally as significant for each viewpoint but will affect price at very different points.
So I agree that trend lines can be both curved and straight although I am not convinced that the market is a spiral. Space time can bend a line and keep it more accurate than a straight line just as space time can bend light and make time elastic.
Taking a single dimensional approach to the market movement makes no sense at all and if you try to discover repeating fractals on a time chart it will sooner or later self destruct because there is no single controlling dimension.
All I intended to do was push the thread on a little. That's my contribution
The main application of fractals to markets that I'm aware of is the claim that markets are scale invariant - which is to say you can't tell a weekly chart from a monthly chart or a 10 minute chart.
This claim is useful because it gives an intellectual justification as to why you can try to use the same patterns at different timescales - some find this comforting.
I suppose you can argue that fractals make sense in nature because they are an efficient construction algorithm. Your DNA contains construction instruction, and some kind of looping behaviour is a logical way to build complexity with sparse instruction.
I don't know why prices ought to be fractal - they certainly appear to be the case, but I think the subtle differences are probably where the real insight lies. Why does momentum appear at one time scale but not the next?
Some people assume that Mandelbrot only turned to look at market prices late in his career, but in fact he started looking at cotton prices in the 1960s.
This claim is useful because it gives an intellectual justification as to why you can try to use the same patterns at different timescales - some find this comforting.
I suppose you can argue that fractals make sense in nature because they are an efficient construction algorithm. Your DNA contains construction instruction, and some kind of looping behaviour is a logical way to build complexity with sparse instruction.
I don't know why prices ought to be fractal - they certainly appear to be the case, but I think the subtle differences are probably where the real insight lies. Why does momentum appear at one time scale but not the next?
Some people assume that Mandelbrot only turned to look at market prices late in his career, but in fact he started looking at cotton prices in the 1960s.
You too are also on to something. Let's disseminate between correlations that guys like T/A trader Jonh Murphy points out in his talks. Let's see just where this goes.
Here's a clip I found on youtube http://www.youtube.com/watch?v=kdkMbxYC9y0&feature=related
I wanted to find the 90 min video lecture to post, but obviously can't get that on youtube. Maybe some of you computer gurus can find it so we can add that to the thread, and get feedback? I don't agree with everything John says, but I'm also not on youtube, bloomberg, money shows, writing books, rich, etc., Lol
Just to let you know the research and sweat equity does pay off but unless you expend the effort, you will never know for sure.
I did. I spent 15 years finding those correlations and you are dead wrong.
Since you have never researched it for yourself, your only response can be . . . "no, I'm right" and that is where I get my ten year old to pitch hit for me.
X, I respect your opinions and your posts but in this instance you need to defer to those that know or defer till which time you can verify it for yourself.
How can a move in price not be related to one before? It must be as i understand. Often with Fib numbers because they are important to human psychology according to research.
Over longer timeframes i guess the future becomes more and more predetermined.
What is time? Just an illusion to our senses? How could they have known so long ago that the time around 2012 would mean a major paradigm shift?
Over longer timeframes i guess the future becomes more and more predetermined.
What is time? Just an illusion to our senses? How could they have known so long ago that the time around 2012 would mean a major paradigm shift?