New Trader

Main Menu

Where financial traders gather

New Trader / Educational / Stalking the microstructure of chaos

Stalking the microstructure of chaos

On occasions a trader may need to turn up the microscope and look deeply into the chaos. For what? A micro-fracture, a microtrend or a small bubble movement that is like the flap of a butterfly’s wings – from which evolves a hurricane. This is the nature of chaos.

The chart below shows a small rising wedge down to the 5 min time frame. ‘We’ don’t know what will happen next. Rising wedges on any time frame tend to create a probability of reversal. We don’t know how far such a reversal will go – and we don’t care! [Probability means a greater probability. I’ve seen rising wedges not reverse at all.]

 

RELATED POSTS

Is Parabolic Mayhem ahead?

On Tradingview I’ve put up a Vlog about this which is embedded below. I sayRead More

Extreme volatility

Whilst volatility is necessary in trading there are issues with extreme volatility that traders needRead More

  • Disentangling currency pairs
  • The nature of expectation in financial trading