Fractal Geometry....Trading?

I've been working on my version of what I consider a different view and
perspective in regard the markets. Benoit Mandelbrot came out with his
so-called Fractals and his book, "The (Mis) Behavior of Markets"...a fractal
view of risk, ruin and reward. There was nothing in his book that revealed
anything that would benefit any of us who are market traders. However,
he has been claimed to be the father of fractal geometry, then all the
great mathematicans in the past before him are the grandfathers and
uncles. It is true that he coined the word "fractal". But his attempt to explain
the chaos in the market as something new would cause traders of our ilk to
laugh so hard to joust ones hernia.
You may not know this, but the Pivot Point is really a fashion of a fractal
demonstration of Cantor Set or Vaclav Sierpinski's equilateral triangle. There
are some trading programs claiming to use fractal geometry, but they are
all false. Surely, there must some traders on this forum who may have
some opinions as well interest in learning more about FRACTAL GEOMETRY.
tonyj

I would definitely be interested in learning more about it.

It's interesting that you mention pivot points as you did. I wonder if it can't help explain an observation I've made about them. Often, it seems that pivot points coincide with major trend lines I've drawn to the exact pip. Is it coincidence or is there some underlying mathematical explanation?

Hagbard: The pivot point is used by a few promoters of their trading program
outright as well others hidden within their methodology. In the forex market,
it has been quite successful, at least from my view. Let me get to the main
point about the pivot. The pivot is the mid 1/3 range of that time frame.
It's imprisoned within that 1/3 range. If the close is at the "high"....then the
pivot will be at the very high of the prison within that mid 1/3 range. In other
words...there is a ratio of close within the range as to the pivot point within
the mid 1/3 range. This is an extremely powerful indicator...because now
you can gauge the market as to where the momentum is located whether
it's above the pivot point or below. That with along as to where your open
may be. It is the open that is really the harbinger of where the market is
going to go for that day or time. The market is a day time article...and the
charts are day-time...because the market is open during the day. Now here
is a very important point: How many hours (time) is that market that you
are trading in....OPEN? If you are trading stocks or commodities....it's
open only a few hours. Let's say, in commodities...there is 5 hours. What
about the other 19 hours? Now do you see why there are "gaps" in both
stocks and commodities. The line is from one point to another point. There
can not be holes in the line, and with the stock and commodity market you
have those holes. The forex market is a twenty four hour market....less
chance for holes. Getting back to the "open". The market is going to go
above and below the open. So the open is the "line in the sand". If the
market is going to go up....it will break the last high, and the low will stay
above the last "low". Depending how soon or late this occurs is what you
have to find out by inspection and study because each one is different.
The market is from the "OPEN to the CLOSE". So what you have is the
sine and cosine action of the market with the tangent angle being the
slope. Even there...you have the logarithm and exponential functions.
But the "open" (line in the sand)...becomes the inflection point between
these two functions. In all this; there is the secant angle and depending
where and whether it's a log or a exponent... then one can determine
when the slope becomes zero as to the turn in the market. Now this is
happening all the time. Even if you're looking at the market, this is going
even if in your view the market trend is up. This is why the odds are that
you will lose in the end. It's like going to a casino. The longer you stay
in the casino, the greater the odds are that you're going to lose. That's
why they give you the drinks for free. The owners know the odds. This
is why "money management" is the most important part of your trading
life. The odds are that you are going to lose...you have to lose, because
you or I don't know what is going to happen. We have to take a small
loss in order to position ourselves to get inside the door. There is a var-
iation in that statement...I hope you understand that.
Tonyj

Hi Tonyj
I honestly find all your writings fascinating.I literally copy paste and re-read them until I can understand them as much as possible..
I have done some research on the Net on C.Drummond,but it seems that his books go for about $1500....
I would really appreciate if I can ask you some questions on some of your trading systems...I know I cant learn and understand Drummond Geometry in a couple of weeks,but never the less...I am willing to learn If you would be so humble to offer..
Please keep on posting as you are by far the best trading mind on this forum....

Regards

JadeFxx_1: I'm at a loss in responding to your request. I really would
like to help you. I've been helping some traders, sans quittance (pay).
I'm an octogenarian and my time keeps repeated by the undertaker
whispering, "You may linger a little longer....but I'll get you in the end".
The P&L Methodology has given me my financial independence. But that
was in commodities many years ago. If you were to ask me if it was
worth it....I would say...."NO". You probably will never find anyone on
any hundreds of forums giving such advice. But again I walked away
from other ventures that offered fortunes and all I had to do was to
reach out and pick it up. But I didn't...it was more exciting to walk
away from it. If you ever get the chance for such an experience...
TRY IT. You will experience something that I, or no one else, can ever
explain. Yes...it's nice to have money. In fact you need it. Yet, the
most exciting time of my life was when I was broke. Where I went
without food and only drank lots of water to fill the space in my
stomach. All as an American in a foreign country, and I couldn't speak
the language. To this day, I have never been able to figure out how
I managed to get thru the ordeal. Nor have I ever figured out how I
managed to survive the battles in the Pacific during WW2. But
back to the P&L hypothesis. All of those ahead of you in this forum
who have tried to hypothesize "Point and Line Methodology" were
wrong. The P&L is a geometry. Only it has never been explained.
First of all....."We all have been brain-washed by gururs like Gann,
Eliot, Pugh etc." Most of you are aware of 'pivot point'. That's what
POINT AND LINE METHODOLOGY is: It's a dress up version of the
pivot point, all in some real fancy and flashy dress...with long black
stockings supported by a 'red' garter belt. She does this high kick...
you know, the kind that tigthens the muscle in your groin. After, if
you can't get the real thing...you resort to a 'hand job'. So there goes
your night in a slop joint. You either win or you lose. The odds...negative.
Like the 'pivot'....the P&L is a rectangular cooridinate...where the 'point'
is the loci. You have to remember that any market is portraited as a
chart. In other words...a picture is a 'thousand words'. What you have
is a chart that is a coupled coordinate....where 'time' is the absissa and
the 'price' is the ordinate. Another way: Price is the function of time.
P=f(t)....and since we look at the chart as a plane. The only truth is
the pip (forex) or the 'tick'. That's where it all 'starts'. The price with
it's range is a transformation of all these 'ticks'. No one among all the
gururs...none of them really explained the 'pip or tick'. In fact...how
many times have you heard or read...."all that noise"? Look...that
'noise' is part of the market. That noise is part of the 'time frame'.
That pip or tick appears all the way up to the yearly and infinity.
The problem appears because they explained their versions as if
the past is the future. The "pip or tick" is this instant....NOW...
where it doesn't have a range. The 'range' only starts the moment
the next 'tick or pip' pops its head out of the "market womb". That
last 'tick or pip' is alive until the close for that 'daily market'. The
"DAILY MARKET?" That's right...the market starts at the OPEN at
the moment when all the traders want to start buying or selling.
During all the trading....you get the HIGH during this time (day)
and the LOW.....and at the end of market (day)...you have your
CLOSE. THAT'S IT. All of it at one time a "tick or pip". Let me explain
something else. The MARKET is a quadrant. With the computer you
can visualize the chart as a 'quadrant'....in other words a "CROSS".
You run a horizonal line and a vertical line at the "OPEN" on the DAILY.
Now the "OPEN" is the 'line in the sand'. All the ranges to the left of
this 'vertical line' is the past...other words the 'grave yard' where
all the 'foot prints' lead to the past. So the "DAILY" can exist only
in the 1st and 2nd quad, going clock wise. (Clock Wise because 'time'
is constant and it goes to the right to infinity). Most of the time in
forex market...the 'close' becomes the 'open'. By viewing the market
as it progresses...you can feel how it is progressing by viewing where
it is in relation to the horizonal line. You make your 'cross' only on
the DAILY. If you like to trade in the lower time, you can jump from
the 'Daily' to any of the 'time frames'. If you want to use the 'hour'
as your 'main clutch'....you can use the Daily for it's R/S points and
then any or all of 'time frames' below the 'hourly' with each of those
with their 'R/S' points. Of course there are more than one way of
doing it. Maybe 'time' is another or included part of the 'clutch'.
The Daily is only to the right of the quadrant...and depending where
it is in 'relation' to the 'open...and horizonal line' can appear either
above or below the 'horizonal'. Since 'time' is involved....the market
shifts to the right. It's here that the rectangular coordinate takes
place. Everything is ZERO at the 'open'. The moment of the first 'tick'
or 'pip' there is no 'range'. The next 'tick..pip' the range begins. As
time progress you start having all kinds things happen. That slope
or trend doesn't always follow a straight line. This is where all the
past and present gururs have been 'goosing us'...even trying to
go all the way up to our goiter. Some even trying to test us for
butter fat. And BOY....how they offer all this for FREE....only at the
end of their spiel...(better at it than selling cars)...there is a price
tag. I've even fell for it...only because I wanted to find out what
they have on their menu. Don't fall for it. There is plendy of free
stuff around...you just have to dig for it. Look....the market is so
complicated. Yeah...they say, "keep it simple". SIMPLE? It ain't
simple, buster. It's complicated as hell...and who wants to make
a toast to Lucifier, when all he wants to do is toast you in his
oven. The P&L is complicated...but once you know it as given
by those who know, you find out that it 'ain't the Holy Grail". I
wish I could tell you different. You just have to keep trying
until you find the 'glove' that fits your hand. Again...I explained
nothing on this plot. I haven't explained methods of the entry,
your target and where and why the stops. Money Management
is probably your most important lesson. And if you are like most
newbies...you probably don't have sufficient capital. Also...with
more and more people entering the forex market you have a
wild arena...where it's like the Christians being thrown to the lions.
Then at night, everyone goes to a night club where they throw
the midgets to the chickens. Another thing...view the fundamentials.
Trade with the technicals...but close-vest all the governments in
the world. Notice how the USA is printing dollars like there is no
tomorrow. If you have 'dollars' you should start thinking where
to best park it in some other currencies. You can do it by going
long in the Euros and elsewhere, if not in the real thing. It's a
game of cat and mouse.
ciao,
Tonyj

As a hopelessly addicted pivot trader, I'm very Intrigued by your intial posts as I suspect a few others I know will be as well.

Just one thought tho... any chance of applying some of that 'fractal geometry' to your posts and coming up with some paragraphs now and then? If not I'll try importing them into my phimatrix tool and seeing if I can split them up that way... sort of a Mandelbrot/Fibonacci fusion thingy.

I would fully understand if you have no interest in attempting to changing your style, and if that's the case, then please don't. Me cut and pasting them into Word and hacking them up to fit my limited attention span and analytical ability is fine with me.

Bottom line here... the whole "throwing the midgets to the chickens in the nightclub" picture was worth it all. ((ak squeegeeing limeade off his monitor...))

Anticipating your next installment and alerting a couple friends here about this thread.

Awesome posts Tonyj! I don't always know what the heck you're trying to say but, I hope you keep 'em coming!

Tony
Wow. Talk about "food for thought".
You are a freaking "banquet"
Thanks

Hi Tonyj
80 years+ WW 2, respect.....ergo the wisdom in ur postings...
As for financial freedom not being worth my while...ur right that is 'new' advice... : )
Please let me start by saying that my aim is not getting any 'trade secrets' from you...
As a matter of fact please tell me more about your solo adventures and you being happy broke,I am really interested cause in all honesty I have been chasing money all my life..
At that stage in your life did you have any family?
To an extend I can understand the freedom that one gets from being broke..if that makes any sense...

As for my own personal experience in the market.....blew one account and have been demo trading ever since..I'd say about two years now
I am definitely past the holy grail stage and know that conventional technical analysis just do not work.
I am slightly confused as to the whole random walk thesis....I read a book by Mark Douglas which in all honesty I loved as it explains that each moment is unique and that it is complete and utter randomness
You have to take an educated 'guess' and see if the market proves you correct..and money manage from there...just to many variables to consider.

...But somehow I think you have a different view on the market ( In fact...how many times have you heard or read...."all that noise"? Look...that
'noise' is part of the market )

I have attached a chart all I wanna ask you Tony....am I on the right track??

I really hope,no make that believe that we can get this thread rolling....
Thanks in advance for your insight and wisdom

Jadefoxx_1: I couldn't make out your chart. Not sure which cross
nor the time frame. Nor where you are on this globe....Asia, Europe...?
I'll spiel out my version of the market on a separate part of this thread.
(I'm a dunce when it comes to computer terminology...so "thread"...????)
Anyway....your market on your chart is in a congestion...or what they
call a trading market. I'm not sure if you were asking about the "CROSS"
or not...but I'll give my spiel on the market for you and others here on
this post.....
ciao,
Tony

Thread = The topic of discussion
Posts = Comments in the thread by each person (subscriber)

To: Jadefoxx_1, FXSurfer, bapxyz....or whoever wants to be concerned:

OK....you guys______________let's see if this can work out. I'll start you
guys with "my version". But let's get this straight. There is no such thing
as the HOLY GRAIL. Also...I'm not GOD. If you even start to think I"m
some sort of "God"....then I'm gonna climb back on the "cross" and HANG
myself and all of you can go to HELL. And that other guy...LUCIFER, will
teach you how to stoke the fire.
Right now you all have a computer and have some version of a platform
that can pop up various crosses of the forex market. Now here is what
you do. Your whole operational premise will be the DAILY. From the Daily
you want to be able to jump from the "tick" to the "monthly"...or if the
platform has it....the "yearly". Now on this Daily....insert a 'horizonal"
line on the 'open' of the Daily....and a "vertical" line of 'todays date'....
Both the 'vertical' and the 'horizonal' line is the "CROSS".....this 'cross'
is the 'Quadrant of the Market'. (You can look at it as the "HOLY CROSS"
....in the name of the father, the son, and the holy Ghost....AMEN").
You are now baptized. So you have four parts....and we go "clockwise"
from the 'upper right'....then down 'lower right', then 'lower left' and then
up 'upper left'. The operating market is ALWAYS to the right of the
'vertical line'....the past market is always to the left of the vertical.
All of this will make sense as you get further into the explanation. How
else can you get into the market...unless it's "Today"? You can only
get into the market to the 'right side of the Cross". The past market is
to the left....either in the 'upper left' of the cross...or in the 'lower left
of the cross. But 'todays market' is from the 'vertical' to the right. And
that one is from the "open" to the "close". In between the 'open and
close' you have 24 hours or 1440 mins. or 86,880 seconds. The "open"
is on the 'horizonal line'. In other words...the 'line in the sand'. The
'close' will be either above the 'line...' or below it...and a bit 'rare'...
the Close will turn out the light and KISS the "open". What they do
after that is anyones guess. In the forex market...most of the time
the 'open' will turn its back on the 'close' and search for greener
pastures. And the 'vertical line' sifts over. We'll get into all the jazz
stuff later. Right now the stage is set up for all the action...and the
girls are about to do their strip tease and the male audience are
about to get their first joust of the hernia. And up in the peanut gallery
....all the groans. Now for the first lesson:
There are only two kinds of markets and there are only
5 kinds of trade. The markets are either in a 'trend' or it is "not in a trend'.
The five kinds of trade are: (1) Trend, (2) Reversal, (3) Enter Congestion,
(4) Congestion Action, (5) Congestion Exit. So most of the time the
'trade' is from (3) to (5). There are even congestions within a congestion.
Sounds simple.....doesn't it? WELL, IT AIN'T. In each of those five kinds
of trade calls for a different approach. You know something.....I'm begin-
ning to regret getting into this. The best and cheapest advice is: DON'T
TRADE IN THE MARKETS.....You probably don't belong in it. The odds are
against you. I'll try to help you with some of the stuff...but the advice
above is still there. Now for another JOLT......don't take everything I
or anyone else's word as being the gospel. Even if this is free...don't
take it as being the final word. You have to find that "GLOVE" that will
fit your hand. It means searching in the pile until you find it. Everybody
will be trying to pick your pocket. You are who you are. Now find out
"WHO ARE YOU?". You will never be able to trade the way I did. Nor
can you have experienced the same life as I have. You would have had
to be an orphan during the last great depression of the 30's. You would
have had to ran away from that orphanage and hop freight trains and
and then go back to that orphanage because it was better. You learned
how to fight...win the golden gloves, turn to boot-legged fighting while
still an amateur for the money. You never knew under what name you
would be fighting under when you arrived at the arena. Sometimes, you
had to fight out of your weight and the other guy was a pro. When I
did fight pro...my manager was African-American and other two guys
in the stable were also African-American and I was 'white'. This was
one of the happiest moments in my life. You would have had to fight
a different kind in the Pacific during WW2...and then look at the blood
on your hands because they said 'no prisoners'. You wonder....could
they have become great doctors, artist, or authors....or given mankind
a great gift. You would have had a night club in Paris, put on jazz
concerts with the likes of Charlie Parker, Roy Eldgridge etc. Acted in
French and American films and loused this up when I was suppose to
be in a Bogart film taking place in Italy. I got hung up with a cowboy
actress in Rome instead, so the part was cut out and I ended up
broke.And the cowboy actress wasn't all that great in bed, and the
booze probably didn't help my appearance when I did get to the film
location. Which was in some village up in the mountains south of
Naples. That's where Bogart asked me "What in the hell happened
to you?" You would have had to dredge for gold...and experienced
another kind of a thing. Besides other kinds of ventures....get
married to a beautiful woman in South Africa. I'm now an old man...
but life has been great. Another thing....There is a GOD....pray to
him...but don't ask for money. You will receive something BETTER.
Will get into some other stuff later....it's a long road and lots to cover.
ciao,
Tony

Thanks for the great post, Tony.

Here's looking at you, kid!
Brent

Thanks Tony
Very interesting perspective with the line in the sand.
What area of the globe do you live in now, just curious my mind will try to get a picture of you as you submit your entries.

This is how I picture it.

If you are using the open price for the day as the inflection point or the 0 on your Y axis, wouldn't price simply coming back to cross that value bring the slope to 0?

If the grid anchors at the opening value of the day, are you using subsequent lows or highs or something else to determine your slope (pips/time)? I ask because every tick would change the slope, unless you are define a channel with a fixed slope for price to work in.

Also, I set my fib tool to take out the middle third of price and show the respective pivots. Are you measuring todays price movement and then waiting for tomorrows open to see where it sits in proximity to the pivot? I'll attach a chart to be clear.


Scotty B

I think it would be great if we let Tony unfold his thinking for a while. Meanwhile not take exception to what he says but rather ask for clarification.
Sometimes I wonder if a lot of people never passed kindergarten. Lets all be polite wait our turn or start our own thread.
Like I use to tell people in meetings, "please hold your comments to the end or until the presenter asks for them, thank you"

I want to tag along...

RR

Tony has already revealed he is not god, remember? No gospel or holy grail to come. Quit holding your breath and trying to stifle discussion for worry the master will be offended withhold our opportunity to eat of the tree of life. I think he was pretty clear about this if you will read what he has said.

He's given many specific details so far about his views on fractal geometry in relation to price charts and I am simply piecing those things together, putting them to the test and coming up with questions. If tony is here to talk about fractal geo in trading, I don't think he'll mind.

Pipo: You got the vertical right...which is the Daily date.
The "horizonal" goes on the "open"....so what you
have is a quadrant. Most of time I'll refer to it as
the cross. Almost 90% of all the traders get nailed
to the cross. And that would be like trying to get
drunk on 'holy water'. This 'horizonal line' is the
"LINE IN THE SAND". No matter what kind of a
program you're using....you will always know where
are. The market is going to be either above this
line or below it. This 'line in the sand' will also
appear on your hourly...but has a hard time
appearing below the 15 min.
ciao,
Tonyj