In my time of trading I have come to learn many lessons and realize many things about the technical aspect of stocks. These lessons have sometimes come at great cost, but a loss is only a loss if no lesson is drawn from it.
One of the most important things I have come to realize is that stock charts operate exactly like fractals. Let’s begin by defining what a fractal is. A fractal according to Wikipedia’s introduction is “a rough or fragmented geometric shape that can be split into parts, each of which is (at least approximately) a reduced-size copy of the whole.” Fractals can be found in almost everything in nature from the way trees are shaped to the human body. It is no wonder that fractals can very much apply to the ebb and flow of the financial markets.
In very simplified terms, a fractal is a self similar pattern of infinite complexity that has fine structures which are too irregular easily described in traditional Euclidean geometric language. In other words they are patterns that are perceivable but are hard to describe. Before I go too far into psychonautic space let’s bring it back to how this applies to trading. My trading method by definition is a trend following system. In a stock a trend is a series of higher highs and higher lows if bullish and a series of lower highs and lower lows if bearish. This is the first connection to fractals, wherein the trends are a self replicating pattern. This, my friends, is just the tip of the iceberg. In stocks a trend can occur in many different time frames, and in order to ensure the strength of these trends, these time frames must align. This is where the geometry part comes in; by identifying the alignment of these patterns on different time frames, one can make a statistically superior decision when trading a particular stock.
It doesn’t end here, my trading method also incorporates fractal geometry in determining where to set stops and entries, as well as determining entry sizes and risk management. This is pivotally important because using this method one can jump trades between time frames and create a long term risk free entry which have unlimited potential for growth.
Over the next few weeks and months I intend on taking you along step by step to giving you the details of my trading method and enable you to use it to book your own serious gains.
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