Fractals and Support and Resistance

Support and resistance lines for using with Financial Markets are tricky to set. One of the reasons for this is that financial market data often obeys fractal properties, and the markets themselves behave in a chaotic fashion. Fractals are self-similar (i.e. look similar at multiple scales), and so don't have any "special" scales associated with them. But support and resistance lines inherently assume that there are special levels at which prices will find it harder to break through, and that breaking through these should be seen as a trading signal. While past behavior of the market is a useful guide to future behavior, these support lines should not be taken too literally, and are "useful" rather than scientific. This video discusses ideas around that.
Fractals are powerful tools for understanding forex, stock market, and other financial market strategy. Some technical analysis experts say they use "fractals" in their analysis of financial markets like forex, but this type of "fractal" has virtually nothing to do with what fractals really are (by which I mean the mathematical theory from which the term "fractal" comes from). And the real fractals are extremely useful for understanding these markets, and understanding them can only help improve your investment strategy making.
DISCLAIMER: This video is intended as an overview of the character of financial market data, for entertainment and educational purposes only. It is not intended as specific advice on how you should invest or trade in financial markets. No specific strategies or recommendations are provided, and you should seek professional advice before making investment and stock trading decisions. I am not a financial adviser or broker. Always seek out qualified advice and carry out your own due diligence before commencing any form of investing or trading.
Koch fractal graphic: António Miguel de Campos - self made based in own JAVA animation. Public domain.

[@vishalnangare31]

Thank you sir for sharing 🙏.

[@fractalmanhattan]

You're welcome!

[@apathyreview3964]

Thank you someone that agrees with me that it's not bloody science. The best thing is to see if price respects a resistance level and if so it's more likely to support it as a future support level. Likewise if it respects that level at least three times in the same time frame. That's basically what people teach. Also make a video on fundimentals. It's probably the hardest and most long term learning investment part of trading and the part people have least understanding of.

[@fractalmanhattan]

Thanks for that, appreciate the feedback! I felt the same way reading Mandelbrot's book. Quick thought: So if a price has respected a level three times in a row, is there a point where in future it becomes less likely to respect it again the next time? (e.g. does it become a "sucker's" level at some point?) Indeed, more of a set of rules of thumb than a science :)

[@Bitc0in_baby]

Very good. I need more video by fractal analysis

[@fractalmanhattan]

Thank you

[@user-pj9vu3xv1o]

Hello, thank you very much for sharing this valuable information, but is there a program that extracts or helps to extract fractals in the financial markets?

[@fractalmanhattan]

Thanks for that. I tend to do processing myself of the raw data, so I can't really recommend a program as I don't really use them. I think it also depends on what you want in terms of extracting fractals -- I think some standard programs say they do fractals, but they probably analyze fractals in some really narrow sense. Sorry I can't be of more help!

[@hanzohasashi3788]

Its an art and bill williams made this art so beautifully scientific that i enjoy, trading with it , i strongly suggest you learn his approach. Ita totally working. Remember that to be profitable , your trading system ( including yourself and decisions you make must be profitable ) your collective decisions makes you a professional trader.

[@fractalmanhattan]

Great comment - that's a really good point, and I do agree that if you find something that works for you that's a great thing. The point I'm mainly trying to make is the same one as you - it's an art and it's not guaranteed to work all the time, so be aware of when and why it might not work. Thanks again!

[@SouthsideEnglewoods]

This vid has nothing to do with fractals right?

[@hanzohasashi3788]

Fundamentals are only new information, they can only be practically when market participants decide to act upon the data. So behavior is much more important than new information

[@fractalmanhattan]

Interesting!!

[@FollowMyAccount]

where can i contact u ? i have a theory that i wanna share it with u its personnal i backtested in in 4 pairs 100 test in each ... it gaves something like 70% winnin rate knowin that all the trades are set to 1:2RR trades .... wha i found interestin in ur video is my theory is based on 'the market is just repetitive fractals' so what i did is cameup with a rele that pick the right fractal that will be projected in the future based on mathematical equations ....

[@fractalmanhattan]

Hey thanks for that! I haven't organized a contact yet and I've been busy on other stuff, and haven't really had any time to put into this further yet. Your idea sounds really interesting, and that's the big question - do trading schemes based on fractals work better than trend following or other methods? I'm sure I'm not telling you anything you don't know, but all methods have their strengths and weaknesses. I tend to think it's important to understand a bit about what's going on with the market you're interested in, and use that to help inform your trading, as I think markets can change phases of behavior - i.e. one method might work well for a while, then not work at all if the underlying dynamics change. I personally think that if you are getting into trading you have to understand what you are trying to achieve and how you can minimize risks, and what you would do if it doesn't work out the way you thought. I wish you all the best and hope you'll add a comment to update us on how well this works!