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Re: MechanicalMethod post# 36

Friday, 01/03/2003 12:12:51 PM

Friday, January 03, 2003 12:12:51 PM

Post# of 2377
MM -

Thankyou for your comments. Fractals are far more complex than checker boards. Fractals exhibit the same level of variation at all scales. I tried to copy some examples but could not get them to paste so I will try to describe.

If you were to look at the three QQQ charts discribed below with the x and y axies covered, you would not be able to differentiate which was which from the data variation.

1) a 2 day chart using 5 minute intervals
2) a 1 month chart using hourly data intervals
3) a 6 month chart using daily data intervals

Only when you zoom out to a 3 year chart does the data begin to exhibit different variation behavior.

4) a 3 year chart using weekly data intervals

People who trade on a minute basis (like Zeev) and those who trade on a daily basis are doing the same thing on different scales. Zeev is happy to make $0.30/share several times a day. Other traders might target making $3/share in a week. It is the same thing, just different scales.

That is why I consider the market to be a perfect fractal. It is predictably unpredictable. A checker board is simply predictable.

FWIW - If Larry's Hal system works on a 6 month scale as his chart indicates, it could be scaled to work on much smaller, quicker intervals and used for day trading if the data inputs are available on intraday intervals.

Cy

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