Thursday, September 5, 2013

Fractal Nature: An unsaid truth of markets and why patterns work? Spot the difference!!!

By Waves Strategy Advisors, For more information visit
We believe in the theory that freely traded markets are patterned and exhibits fractal nature.This makes them behave in a predictable manner. By pattern we mean that there are certain structures that repeat itself from time to time and can be seen on charts that shows prices of any tradable instrument.
The “Fractal Nature” is again an important concept which states that these repeatable patterns occur on varied time scales and can be seen on 1 minute charts to Daily charts to Monthly charts. Fractal structure is seen in nature across from DNA to snowflakes to galaxies and so it is also seen in stock markets which reflect collective emotions and social mood of humans.
Can you Spot the difference?

Now we will reveal what are above 2 charts.
The first chart is of 10 mins scale and the 2nd is a daily chart. Isn’t it astonishing to see such similarities across time frames. NOW WAIT. There is more to it which will probably thrill you further. The first chart is Nifty index 10 mins chart and the next chart is of FTSE 100 (UK stock market) daily chart. Can you see striking similarities across Intermarkets and that too on different time scale!
This Elliott wave patterns are seen across the world major stock indices.
Everything in this world is systematic & patterned and there is no place for randomness to exist for extended period of time. We are against the theory of Efficient Market Hypothesis that claims humans are rational animals. This is against the law of nature and humans do deviate away from rationality and choose the path of herding thereby exhibiting trends; patterns of repeatable forms / structures, making it plausible to predict the markets.
There is no chaos in this perfectly rhythmic world which is driven by the laws of nature and freely traded markets like stock markets are no exception!
Useful for:Understanding Fractal nature, What is Fractal nature?, Trading using Fractal nature
Related to:Fractal Nature,stock market,understanding stock market using fractal nature,Elliott wave,Elliott wave analysis,Nifty,FTSE,Elliott wave patterns,Efficient market hypothesis

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