What's a FRACTAL? | Forex Factory

Options

Permalinks
Print Thread

Similar Threads

Non-deleting Fractal to Fractal Trendlines mq4 3 replies

fractal indicators 1 reply

Fractal alerts based on when fractal is confirmed 0 replies

Fractal based trendline indicator, horizontal fractal S/R indicator 6 replies

How to plot 'fractal' type arrow indicators 4 replies

What's a FRACTAL?

  • #1
  • First Post: Jan 10, 2006 6:19pm Jan 10, 2006 6:19pm
I found a bit on the net before I got frustrated with people pitching systems without saying what it was. Anyone got a good link or up for standing on the podium to teach the noobs?
  • #2
  • Jan 10, 2006 6:29pm Jan 10, 2006 6:29pm
not sure how the trading system that is based on fractal works, but try googling fractal-geometry, or fractal, or mandelbrot(he invented fractals) ..

ken
Trade what you see, not what you believe.....
  • #3
  • Edited 7:35pm Jan 10, 2006 7:27pm | Edited 7:35pm
Simply stated, fractal bars are higher (lower) than the two (or more) bars preceding it and the two (or more) bars following it. There are a number of fractal formations that are helpful to recognize. I trade a breakout system that takes the most recent high/low fractals as breakout points. Also, fyi, these often correspond to james16's pins, beob, etc. (using his terminology) if you happen to follow the james16 thread.

btw, I'm using Williams' definition and you could rightfully argue that his definition isn't really about "fractals" at all and I would concur, however this is often what is meant by "fractals" as it relates to trading, at least in my experience.
  • #4
  • Jan 10, 2006 7:29pm Jan 10, 2006 7:29pm
Ahhhh Grashoppers....
I wish that I could impart but a fraction of the wisdom rustling in by bosom pertaning to fractals.......

I can't belive that I said bosom. OK In it's basic form a fractal is something that is self similar on many levels. Look at a maple tree. Then look at a leaf. The patern of the leaf is similar to the structure of the branches of the tree. If you break of a piece of the leaf, the patern repeats and so on.

Little fleas have littler fleas
Upon their backs to bite 'em.
And so on and so on
And so on ad infinitum.

Once you start looking for repeating paterns you see them everwhere. Sea shells, sunflowers, pine trees, mountian ranges, inscet eyes, clouds, the list goes on and on.

Another aspect of fractal math is that of dimension. In regular (euclidian) geometry we use whole numbers to count dimensions. Fractal math folks use rational numbers. So we can say that that object has a dimension of 2.7

Ok a simple question: How long is the coast of California? The answer: it depends. Whadda ya mean it depends. Well it depends on how long your meter stick is. If we just drag out a map and run a piece of string down the Pacific Ocean, we are going to get one answer, but if we actually walk the coast with a meter stick, we will get another. Now if we want to get anal about it and get a microscope and measure around every grain of sand then the number gets even bigger. And if we go atomic, or to the quark level... I think you get the point. In the fractal world things are not always what they seem.

In Forex, if you look at a chart, and nobody tells you what time scale it is, it is quit hard to figure out. The paterns that you see in a yearly chart are about what you would see in a five minute chart. There is also the fractal nature of traders themselves. We trade on various time horizons. Some scalp while some are in for the long haul. This in fact is what gives retail Forex it's stability. A position trader may find it profitible to go long while at the same moment, for his own reasons, a scalper may decide to short the same pair.

On a practal note, people have written many systems and indicators based on Fractal math. Often the easiest one to get your hands on is Polarized Fractal Efficiency. It measures the choppiness of the market. You can even pay a lot of cash for "black box" systems to spit out "holy grail" http://www.forexfactory.com/forexfor...ead.php?t=3694
type answers.

But alas dear grasshoppers I must flee. My starving children are crying and I must find a crust of bread to soothe them.

Trade and be happy Grasshopper
Nolite dormiens pungere ursum. -- Latan Proverb.
  • #5
  • Jan 10, 2006 8:31pm Jan 10, 2006 8:31pm
Quoting MrWhipple
Ahhhh Grashoppers....
I wish that I could impart but a fraction of the wisdom rustling in by bosom pertaning to fractals.......

I can't belive that I said bosom. OK In it's basic form a fractal is something that is self similar on many levels. Look at a maple tree. Then look at a leaf. The patern of the leaf is similar to the structure of the branches of the tree. If you break of a piece of the leaf, the patern repeats and so on.

Little fleas have littler fleas
Upon their backs to bite 'em.
And so on and so on
And so on ad infinitum.

Once you start looking for repeating paterns you see them everwhere. Sea shells, sunflowers, pine trees, mountian ranges, inscet eyes, clouds, the list goes on and on.

Another aspect of fractal math is that of dimension. In regular (euclidian) geometry we use whole numbers to count dimensions. Fractal math folks use rational numbers. So we can say that that object has a dimension of 2.7

Ok a simple question: How long is the coast of California? The answer: it depends. Whadda ya mean it depends. Well it depends on how long your meter stick is. If we just drag out a map and run a piece of string down the Pacific Ocean, we are going to get one answer, but if we actually walk the coast with a meter stick, we will get another. Now if we want to get anal about it and get a microscope and measure around every grain of sand then the number gets even bigger. And if we go atomic, or to the quark level... I think you get the point. In the fractal world things are not always what they seem.

In Forex, if you look at a chart, and nobody tells you what time scale it is, it is quit hard to figure out. The paterns that you see in a yearly chart are about what you would see in a five minute chart. There is also the fractal nature of traders themselves. We trade on various time horizons. Some scalp while some are in for the long haul. This in fact is what gives retail Forex it's stability. A position trader may find it profitible to go long while at the same moment, for his own reasons, a scalper may decide to short the same pair.

On a practal note, people have written many systems and indicators based on Fractal math. Often the easiest one to get your hands on is Polarized Fractal Efficiency. It measures the choppiness of the market. You can even pay a lot of cash for "black box" systems to spit out "holy grail" http://www.forexfactory.com/forexfor...ead.php?t=3694
type answers.

But alas dear grasshoppers I must flee. My starving children are crying and I must find a crust of bread to soothe them.

Trade and be happy Grasshopper
your a sharp guy whip. fijitrader is also very versed on this subject. maybe he will spot this and comment. jim
  • #6
  • Mar 21, 2006 11:12am Mar 21, 2006 11:12am
Ok, so this has nothing to do with trading...but creating "Fractals" in art is lots of fun. And there are many free programs to do so available. A fun link is at my domain at my Fractal Art Page. (there are also a couple of links to the free software i used to create these thumbnails). . a few small fractal examples:

http://accrete.com/fractals/thumbnail/t-3dpath.jpg http://accrete.com/fractals/thumbnai...sculptvase.jpg http://accrete.com/fractals/thumbnai...-butterfly.jpg http://accrete.com/fractals/thumbnail/t-landing.jpg

Silly stuff, but whoever said math had to be boring never played with fractals!
; - )
  • #7
  • Mar 21, 2006 1:18pm Mar 21, 2006 1:18pm
Quoting accrete
Ok, so this has nothing to do with trading...but creating "Fractals" in art is lots of fun. And there are many free programs to do so available. A fun link is at my domain at my Fractal Art Page. (there are also a couple of links to the free software i used to create these thumbnails). . a few small fractal examples:

http://accrete.com/fractals/thumbnail/t-3dpath.jpg http://accrete.com/fractals/thumbnai...sculptvase.jpg http://accrete.com/fractals/thumbnai...-butterfly.jpg http://accrete.com/fractals/thumbnail/t-landing.jpg

Silly stuff, but whoever said math had to be boring never played with fractals!
; - )
SO COOL!!! I GOTTA TRY THE CHAOSCOPE!! WOW!!

THANKS ACCRETE!
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
  • #8
  • Mar 21, 2006 6:30pm Mar 21, 2006 6:30pm
Quoting diallist
SO COOL!!! I GOTTA TRY THE CHAOSCOPE!! WOW!!

THANKS ACCRETE!
Oh Nooooooooo! There goes the weekly pip gains. Ain't no focusin' when your doodlin in ChaoScope!
;-)

I think one of my more artsy-fartsy (can i say that here?) moments was when i created this one i named;

"Thar be whales Scotty!"

http://accrete.com/fractals/fscape/whales.jpg
  • #9
  • Mar 22, 2006 10:23pm Mar 22, 2006 10:23pm
Way cool dude! Sorry I haven't been by lately. since I installed someting on my system, I can't hit backspace without getting bounced out of the post. I will have to checout your fractal links.
Nolite dormiens pungere ursum. -- Latan Proverb.
  • #10
  • Apr 5, 2006 12:17pm Apr 5, 2006 12:17pm
Thanx dude now that I have downloaded that drated chascope program, I can't get anything done. it is just tooooo much fun. Now I will never get my new webpage up and running. It is just way rad dude. thanx for the tip.

Now that I am hyped up on fractals again, my son's math teacher has asked me to teach a series of calsses at his High School on Fractal Math. She even borowed a bunch of my Fractal Math books.

Thanx, You have ruined my life ;0
Nolite dormiens pungere ursum. -- Latan Proverb.
  • #11
  • Apr 5, 2006 12:48pm Apr 5, 2006 12:48pm
Quoting MrWhipple
Thanx dude now that I have downloaded that drated chascope program, I can't get anything done. . . Thanx, You have ruined my life ;0
LOL. Well like one of my favorite sayings goes; "Find a way to make someone's day"... guess ruining your life in a good way would line up w/my goals ey?

Happy Fractaling (can i say that?)

Thom
  • #12
  • Sep 12, 2007 11:12am Sep 12, 2007 11:12am
I posted just awhile ago, somewhere on this forum, in regard FRACTALS. I
wasn't aware of this post.
First of all....all those systems or program professing to be fractals are not
really fractals. Bill Williams is one of those claiming fractal geometry...but
it is nothing but Charles Drummond's "isolated high"....along with his
"phantom high and low" in his "Point and Line Methodology". (I was a disciple
of Charles Drummond going back forty years ago). Let's get this straight.
The only truth is the "tick". Price is the function of time...P=f(t). As soon
as the "tick" is replaced by the next one, that "tick" is history....and thus
ends up next in the minute, five, etc. time-frames. No matter where you go
in the time-frame, the "tick" did its tap dance...it was there. Think real hard
about this. The "TICK" is the fractal part....it's what I call the "Sitting Ducks".
These are the roosting sitting ducks....not the kind that hangs around your
chicken house with the rooster wondering how he's "gonna do it". Especially
if he tries it standing on one foot. I can't go into all the aspects of the
"sitting ducks" because of the math that involves the exponential and the
logarithmic as well the mid y=mx+b straight line. But it is really in the "ticks"
that is the "fractal heart and soul" of the market. It is here that Benoit
Mandelbrot really showed that he didn't have a clue as to what is really
the market. Had he had any idea that there was such a thing as the "tick"
he probably would have been more creditable. The real introducers to the
fractals, although not coining it, were Balzano and Weierstrass.
Tonyj
  • #13
  • Sep 12, 2007 3:25pm Sep 12, 2007 3:25pm
tonj - first, and admission, I don't use fractal analysis for trding - but that said, one has to remember that fractal analysis represents an approximation, the same way that (say) a straight line drawn on a screen is not really a line, since the pixels have width, and true lines don't.
In that sense, it's perfectly reasonable to use fractal analysis for markets - Mandelbrot's book "The (Mis)behavior of Markets" and "Fractals and Scaling in Finance" are good resources on that. Personally I've seen similar used in the modelling of turbulent flow in pipes (that's what my MSc paper was on), cloud cover in atmospheric studies, and polar ice classification....

From the point of view of using self-similarity (which is not necessary in fractals - only fractional dimensionality is) for analyzing price movements, one has to remember that the price is only a sample - someone trading at exactly the same time through a different dealer can easily get something different, while for many of the more important trades you will never see the price, as they may be done over the phone. Or the tick may not have been a traded price at all, since most dealers will fill dead time with random ticks, or record simply the bid/offer on their charts. There is no real, absolute price, except the one you actually trade; all the rest are simply approximations on a finer or coarser scale to the general tendency of the market.

From there, one picks the approximation most suitable to one's own trading style, whether it's ticks, or monthly candles, or fractals.
  • #14
  • Sep 13, 2007 2:25am Sep 13, 2007 2:25am
Hi GoatT

I have a couple of e-books/manuals here on Quantum Futures' The Fractal's Edge trading system, which is based on Chaos Theory. PM me with your e-mail address if you'd like me to send them to you. I downloaded these (albeit some time ago) free from their site: http://www.fractalsedge.com/

This is very similar to Bill Williams' system - more on this here:
http://www.alpari-idc.com/en/market-...ory/index.html
http://www.profitunity.com/

I understand Cecil Robles also sells his own Chaos Theory ("Chaos Theory, Fractal Geometry, Wavelet Theory, and Quantum Physics") based educational package: http://www.fundamentaltraders.com/

Hope this is useful. I make no recommendations, you will need to investigate all of this material for yourself. Suggest you Google "Chaos Theory", "Fractals" etc yourself for more links.

David
  • #15
  • Aug 15, 2009 9:50am Aug 15, 2009 9:50am
I think here NOBODY of you (and maybe of the world) have understood what fractal geometry is, applied to the market.

Yes some very smart person understand it, but don't talk about it with any other people, understanding the fractal geometry of market is the only way to understand how market work and why it work, but all those gurus are just scams, don't spend too much time with it!
  • #16
  • Last Post: Aug 22, 2009 2:23am Aug 22, 2009 2:23am
Just got my hand on Williams book on factal ,elliotwave,although am not a fan of EW,the book is well written,there are some gems which can be incorperated into any system.To me factual is just a fancy name for a simple pattern that was around many moons ago.It's a trend following break out system,the same as the ABC or 123 patterns,instead of entering on the fib. retracements levels they enter on the break fo the previous swing high or swing low.The five bars count is just a shallow fib. retracement and break out from the previous swing.The system is really an EW Factual course .I will not be trading that system because of late entries.Onething I can leave you with is one of the indicator he uses believe it or not it's the MACD histogram turned into a very accurate Oscillator the settings are 5/34/5 it's great,if used with another great tool Cardwell RSI system.I will be trading with the MACD Histogran and will report on my success.Always remember when you hear of anything new do your research things may sound different but may be just the same old idea used in a different way.
0 traders viewing now