Trading Chaos

B. Williams

Chaos Theory - a new view of the market. It allows us to see the wasps mainly structure that controls the behavior of the market. This also eliminates the ambiguity arising from the forecasts Elliott wave theory.

While chaos (this word is not very lucky with the connotation everywhere replace it with the true meaning, but we'll discuss this in Chapter 3) older than the human civilization, chaos theory has been applied in practice only after the wide dissemination of powerful computers.

You powerful computers for the application of the theory of chaos in the trade do not need: super computers were needed before and used to isolate the basic structural and behavioral aspects of markets, essentially important and still escape the attention of the average trader.

The methods of fractal geometrii1 - one of the directions of the science of chaos - in 10 seconds to analyze any market and find out what exactly should be taken on it. Many of my students experienced traders initially professed technical analysis; at the time they were required to make a decision dozen days: technical analysis deprives them of 6-10 hours per day.

Until recently, the majority of traders and scholars ignore or reject this taboo subject - the "wrong side" of reality. They chose to study the good old Newtonian mechanics, they preferred to describe the beautiful ellipses form of planetary orbits. Although these "ideal" model, as we now know, are aberrations of natural processes, it is easy to understand their appeal. Classical physics is steadily follows its smooth roads.

Chaotic (natural) system is not so attractive: they obey the laws of nonlinear dynamics. These phenomena (phenomena) under-firmed the presence of complex feedback loops in cyclic systems, non-periodical occurrence of which can not be predicted. For example, if one hesitant to push the pendulum to the other, about vibrations, they may become "wild" erratic. Similarly, there are breakers from-hlynuv from the pier, tidal wave encounters resistance and "destroyed". The size of the wave in the varying degrees of increases or decreases. The brow-vecheskom brain electrical impulse of a neuron as nepredska zable-way amplified or attenuated under the influence of nervous impulses related neurons ...