Is there Order in the Chaos?
My Custom Collection of Add-Ons built for NinjaTrader is called the Signature Series. And for good reason. I operate on the belief that the market has Signatures of Repeat-abilities.
The underlying premise is that, despite a chaotic appearance, there are obscured layers of structure and order. And a trader just needs the equivalent of one of those 3D pair of Movie Max spectacles to “see” it.
I owe my incessant interest and obsessional pursuit of the topic to a couple of brave authors and teachers.
Each of them had their root beliefs firmly potted in the legendary works of WD Gann, Fibonaccis and the Golden Ratio. The common link of course is geometry.
Mind you, it’s only when I reluctantly took up a practice of hand charting that I started putting all the pieces together. After the convenience of the digital charting world, I found hand charting a tedious undertaking. But seeing is believing right?
If you are neither motivated or inclined to take massive pieces of graph paper and painstakingly plot price to a scale (ie a scale that won’t subsequently run your X, Y axis off the available wall space of your office and into the hallway) then there are other things you can do. And all without leaving the digital landscape. It’s simple. Draw up some lines. Get your eye in. See if lines repeat over the chart.
Crudely speaking, you can spot and draw these gradients by eye although it is preferable to have a protocol.
ie Does a certain gradient/s seem to catch turning points in the market? When the market is heavily trending, does it tend to hold a certain steepness of slope for the meat of the move?
If these sort of forensics show a positive outcome, it doesn’t take much to work out that reliable line applications could be real time ways to measure price action. And outperform lagging indicators.
If you want to start cataloguing & recording gradient , you can use the central arm of a Gann Fan (1×1) expressed in Points Per Bar. Personally I believe this tool is the closest thing you’ll get to an online protractor. Afterall, expressions of degrees in a digital landscape distort depending on the stretch and zoom of your X and Y axis. Points per bar has a gradient stability that nicely compensates.
Sidebar – Not all charting platforms have a reliably built and designed Gann Fan. NinjaTrader’s Gann Fan Tool is excellent. The Signature Gann Fan from NinjaTrader is altogether next-gen.
Next would be to see whether the allegedly repeating gradients are at play over multiple timeframes. If all the above proved fruitful, one might soon be enquiring…..
if there is a stepping off point between order and chaos?
ie If symmetry does exist, does it exist ONLY sometimes? Periodically even? Or if something qualifies as symmetrical then, by its very nature is it always symmetrical?
These were all key questions in my own trading journey. It helped to cultivate my belief in geometry of the stockmarket. And represents the sifted logic behind the development of the tools you’ll find in the Signature Series. These are tools like no other in the charting landscape.
One final anecdote on the subject. Because my methodologies pivot around the idea that the market has inherent symmetry, my view is universal. In other words, the symmetry I might only choose to view on a 5 minute chart for instance (because it might be a preferred timeframe to monitor steep intraday trends) isn’t something I would treat as exclusive to that timeframe. My view is that it must somehow be inherent to a mastered “universal” symmetry – simply because it makes no sense that individual timeframes would spiral out their own symmetrical universe. That would be chaotic would it not? And that’s the very concept I’m suggesting needs to be put under the microscope.
By this charter, no one will be surprised if I outed myself as a lover of Fractals and Mandlebrots. Don’t worry if you don’t understand these terms. I’m here to say you do actually and might not even realise it.
If you ever had a kaleidoscope as a kid, you are already familiar with the concept of fractals and mandlebrots.
Now here’s an interesting flow-on thought. If you’ve ever had that head-wrecking suspicion that the market TRANCED you, especially after sitting in front of it for hours, now you have a legitimate explanation. If there really are fractals at play within the market, each fast moving timeframe might well be the adult version of this childhood toy!!
In celebration of my love for Fractals, I want to give a shout out to the amazing artwork of Kelly Dietrich. Please enjoy her gorgeous website, home to all things Mandalas. https://www.kellydietrich.com/
Enjoy this beautiful free meditation featuring her original fractal artwork – a great way to sorbet your brain before starting a trading day.
Disclaimer – This post is intended for information and entertainment purposes only. It should not be regarded as financial advice, recommendation, or solicitation of any product, service or trading strategy.