Fractal Theory I
- Thread starter llIHeroic
- Start date
Bleh, okay.. where to begin? This is a very complex trend. I can't answer your questions properly either because there are still a few problems with your ability to annotate without accidentally dropping fractals over time. So, let's try to address that.
Firstly though, there's something weird with your data. With the overnight gap removed, my 9.55 Bar on the 4th breaks the 15.40 low of the 3rd by two ticks only. Why does yours plummet through the LTL? There isn't a VE here at all for me, which is going to cause some problems. Don't know why there is such a discrepancy between our data.
Regardless though, take a look at this gaussian illustration. Fractals are built with volume sequences and price geometry. Until we clear the RTL of the previous container on whichever fractal, we can't arrive at P2 of the next container on the same fractal. So, even though we might see a series of peaks and troughs, along with Dom and Non-Dom price movement, the location of where it is occurring is relevant to understanding which fractal it's on.
I've zoomed in on the FTT -> P2 movement on the image. Imagine a sub-fractal container [drawn in black] taking us from the FTT of the Red trend to the P2 of the Green trend. Regardless of the volume sequences in the purple bracket to the left, we can't begin our 2B of the Green Trend's B2B until the RTL is cleared. All of the sequences before this point are sub-fractal to the R2R2B2R of the Red Down-Trend. However, once the blue bracket on the right is reached, increasing volume can now give us P2 of a higher fractal; the one which is equal to the Red Downtrend.
So, although the price container and volume sequences may look identical when taken out the of context, depending on where we are in the geometry of the larger trends, the gaussians will be assigned to different fractals.
Therefore, if you take a look at the up-container from 9.55 to 10.45 on the 4th, although it has a full volume sequence within it, the volume sequence within it is actually sub-fractal to the down-trend and therefore not eligible to advance the slower trend, because we are only at P2 [i.e. B2B] at 10.35 via the slower geometry [RTL from 11.10 on the 3rd to 9.45 on the 4th], after which we don't get to complete a full sequence on the slower fractal before the sequence continues downward. Since it's not equal, the trend doesn't advance. If 10.45 OB had increasing volume, it would be equal and the slower trend would advance.
Hope that helps. This whole paradigm is notoriously difficult to transfer, but with enough study and contemplation hopefully more and more pieces will continue to click over time.
Firstly though, there's something weird with your data. With the overnight gap removed, my 9.55 Bar on the 4th breaks the 15.40 low of the 3rd by two ticks only. Why does yours plummet through the LTL? There isn't a VE here at all for me, which is going to cause some problems. Don't know why there is such a discrepancy between our data.
Regardless though, take a look at this gaussian illustration. Fractals are built with volume sequences and price geometry. Until we clear the RTL of the previous container on whichever fractal, we can't arrive at P2 of the next container on the same fractal. So, even though we might see a series of peaks and troughs, along with Dom and Non-Dom price movement, the location of where it is occurring is relevant to understanding which fractal it's on.
I've zoomed in on the FTT -> P2 movement on the image. Imagine a sub-fractal container [drawn in black] taking us from the FTT of the Red trend to the P2 of the Green trend. Regardless of the volume sequences in the purple bracket to the left, we can't begin our 2B of the Green Trend's B2B until the RTL is cleared. All of the sequences before this point are sub-fractal to the R2R2B2R of the Red Down-Trend. However, once the blue bracket on the right is reached, increasing volume can now give us P2 of a higher fractal; the one which is equal to the Red Downtrend.
So, although the price container and volume sequences may look identical when taken out the of context, depending on where we are in the geometry of the larger trends, the gaussians will be assigned to different fractals.
Therefore, if you take a look at the up-container from 9.55 to 10.45 on the 4th, although it has a full volume sequence within it, the volume sequence within it is actually sub-fractal to the down-trend and therefore not eligible to advance the slower trend, because we are only at P2 [i.e. B2B] at 10.35 via the slower geometry [RTL from 11.10 on the 3rd to 9.45 on the 4th], after which we don't get to complete a full sequence on the slower fractal before the sequence continues downward. Since it's not equal, the trend doesn't advance. If 10.45 OB had increasing volume, it would be equal and the slower trend would advance.
Hope that helps. This whole paradigm is notoriously difficult to transfer, but with enough study and contemplation hopefully more and more pieces will continue to click over time.
Attachments
![[9-7] Fractals.png](/et/data/attachments/138/138657-47dc062dbf821a45427af40e419cc17a.jpg?hash=R9wGLb-CGk){kind=small}
Actually that does help. Thanks for articulating the concept. It puts some things in sharper perspective for me. I now also see that a major error resulted from my assumption, for some reason, that the traverse steepened at 10:30. As far as my original question regarding apparent completion of the sub-fractal BBT3 and sub-fractal tape without the benefit of FTT or exhaustion, I believe it is explainable. Since fractal theory should apply to any fractal, at some point the unfinished sub-sub sequences can become too small to see the sequence play out on the 5m chart. At 14:25 a remaining smaller sequence continued until it completed at 14:35, at which point we did have ftt and exhaustion.
I've tried to give an outline of basic annotation principles along with enough framework for people who want to practice and refine this paradigm of technical analysis to begin to do so.
Once you get past a certain point, I feel that more and more of this stuff becomes self-correcting. A few broad guidelines I'd offer are the following;
1. Use set procedures to annotate every event. Don't fudge things here and there because you think you made a mistake somewhere and need to correct it, or just end trends where it "looks" like they should end rather than having a defined reason to complete them. An FC having an ITZ VE should always mean the same thing to your annotations, etc.
2. If the market is fractal, you're going to need to treat every fractal the same. This one is huge. If you don't do this, you're essentially turning the method into a subjective real-time analysis of price and volume behavior and missing the true beauty and reliability of Fractal Theory, in my opinion. A fractal has similar parts in every scale by definition.
This is why equality is necessary to annotate proper fractals. This is the definition of a fractal. The smaller cycles need to be identically composed as the bigger cycles, ad infinitum. You need three equal building blocks to complete a Tape. You need three fully completed Tapes to build a Traverse, and so on. There are volume requirements and geometry requirements for this cycle as well that we were just touching on above.
3. Annotate as many fractals as you can keep track of. This is a huge learning tool that is easy to overlook. Really drives home point #2 above and forces you to annotate every component of your smaller fractals properly; helps highlight areas where you have errors or improper procedures because the bigger fractals won't build intelligibly. Also you can get a feel for general characteristics of Non-Dominance, Dominance, VE's, and other things as you see them play out on larger fractals as well as smaller.
4. If possible, work with others. We always have the opportunity at the end of the market day to debrief on what our annotations were, and if all of the fractals don't build identically or you weren't able to keep the integrity of the P/V patterns of the trends, you know you made a mistake somewhere. I still occasionally find errors or weak spots in my own annotations when the market eventually moves in a way that has me re-thinking if I annotated things correctly at a specific point.
We take known parts and hypothesize how we could annotate the others, and apply them across the board to see what sticks. Having another person do this with you is very valuable, as they may have different strengths, or they can help you generate and test hypothesis for areas of confusion. A few private correspondences I had last year with another member here who practices this method were extremely valuable to my own personal development in understanding this stuff.
Once you get past a certain point, I feel that more and more of this stuff becomes self-correcting. A few broad guidelines I'd offer are the following;
1. Use set procedures to annotate every event. Don't fudge things here and there because you think you made a mistake somewhere and need to correct it, or just end trends where it "looks" like they should end rather than having a defined reason to complete them. An FC having an ITZ VE should always mean the same thing to your annotations, etc.
2. If the market is fractal, you're going to need to treat every fractal the same. This one is huge. If you don't do this, you're essentially turning the method into a subjective real-time analysis of price and volume behavior and missing the true beauty and reliability of Fractal Theory, in my opinion. A fractal has similar parts in every scale by definition.
This is why equality is necessary to annotate proper fractals. This is the definition of a fractal. The smaller cycles need to be identically composed as the bigger cycles, ad infinitum. You need three equal building blocks to complete a Tape. You need three fully completed Tapes to build a Traverse, and so on. There are volume requirements and geometry requirements for this cycle as well that we were just touching on above.
3. Annotate as many fractals as you can keep track of. This is a huge learning tool that is easy to overlook. Really drives home point #2 above and forces you to annotate every component of your smaller fractals properly; helps highlight areas where you have errors or improper procedures because the bigger fractals won't build intelligibly. Also you can get a feel for general characteristics of Non-Dominance, Dominance, VE's, and other things as you see them play out on larger fractals as well as smaller.
4. If possible, work with others. We always have the opportunity at the end of the market day to debrief on what our annotations were, and if all of the fractals don't build identically or you weren't able to keep the integrity of the P/V patterns of the trends, you know you made a mistake somewhere. I still occasionally find errors or weak spots in my own annotations when the market eventually moves in a way that has me re-thinking if I annotated things correctly at a specific point.
We take known parts and hypothesize how we could annotate the others, and apply them across the board to see what sticks. Having another person do this with you is very valuable, as they may have different strengths, or they can help you generate and test hypothesis for areas of confusion. A few private correspondences I had last year with another member here who practices this method were extremely valuable to my own personal development in understanding this stuff.
A trading group is highly recommended; just make sure the other participants are at the same or higher level and yourself. I suggest you spend more time on the source of this method then in this thread.
Try and get your hands on the seven skype recordings that were done between Spyder and another forum member. I cannot mention the other forum handle to avoid a bombardment of emails. The only clue I can give you; 1) It was Spyders best friend 2) they hardly posted on the forum. 3) Spyder left they lest. If you read between the lines you should work out.
Spyder takes them through around 22 charts bar-by-bar. The last three recordings are the diamonds. Spyder discusses concepts that were never mentioned in any forum or thread. In Spyders own words it was intentional.
Good Luck
PS- It’s not Mac
Try and get your hands on the seven skype recordings that were done between Spyder and another forum member. I cannot mention the other forum handle to avoid a bombardment of emails. The only clue I can give you; 1) It was Spyders best friend 2) they hardly posted on the forum. 3) Spyder left they lest. If you read between the lines you should work out.
Spyder takes them through around 22 charts bar-by-bar. The last three recordings are the diamonds. Spyder discusses concepts that were never mentioned in any forum or thread. In Spyders own words it was intentional.
Good Luck
PS- It’s not Mac
Thanks a lot, i'll try to find this, have a nice day
Hi everyone, here is an attempt to apply some of these principles during a trading day.
I had some moments of consciousness where i felt "in tune" with the market, other than that most of my containers are probably wrong since i didn't dig the equal containers stuff yet, i attached questions to the chart.
I don't know if my gaussians are that good either, i hope someone will have a better chart so i can try to change my framework.
If someone has some suggestions on what would be a good debrief for me that would be welcome as well.
Good learning and good trading to everyone.
I had some moments of consciousness where i felt "in tune" with the market, other than that most of my containers are probably wrong since i didn't dig the equal containers stuff yet, i attached questions to the chart.
I don't know if my gaussians are that good either, i hope someone will have a better chart so i can try to change my framework.
If someone has some suggestions on what would be a good debrief for me that would be welcome as well.
Good learning and good trading to everyone.
You're probably right, you could do this on most of my fastest containers i guess, my way of constructing them was to start with two bars and making the container match with the fastest volume sequence i could see on the volume pane, but maybe finding volume sequences or even FTTs for FCs on the 5min TF isn't mandatory, i'll let someone better than me clarifying this.
Thanks for the review midtown
Thanks for the review midtown