Are smart money algorithms run on a quantum computer?

I guess you could say retail traders are so small they don’t bother worrying about them. It wouldnt even be enough out of their profits to notice.

Correct me if Im wrong but there would be no Market stability. Wild west so to speak. EUR/USD would be 1.05 Bid; 1.095 offer. No one would be able to trade it and the SM would not be able to take advantage of such conditions. DM tolerance is factored in.

Hi Shalva.

Yes, the COMPLETE “market making” process of the SM algos is fully automated. Yes, there are of course specific “thresholds” which determine certain action. For example, a large accumulation of positions (i.e. 400 on the scale) will influence which move is prioritized next. Yes, the SM manages to simultaneously “lure” in new DM traders as well as “killing” the current ones. I find that particular point very fascinating. But think about it through the “MK lense”; if DM longies enter “above” the upper H4 band for example, thinking that the “previous high is now broken and momentum will continue”, then the SM does an H4 reversal down, placing these longies into DD, this right after they just took the LTS of the older DM shorties from before (and who led the SM to push the market towards the upper band).
Yes, to the “outsider” all FX markets look like complete “chaos”. There are whipsaw moves, dirty trends, unclear support and resistance levels, plateaus, failed reversals, uneven pullbacks, mixed with strong trends, rather even consolidations etc.
In that sense, FX is “efficient”. However, the MK trader “sees” what is going on behind the curtain and understand the “causality”.
Also remember the “anti-learning principle”, the DM has no real chance to “learn” by simply watching the naked price action. Because once they see a “head and shoulders pattern” unfold, but the other time they see the EXACT same price action with the opposite outcome, this because the DM was literally on the opposite side this time. The SM algos DO TAKE into consideration what the current “occurrence” of such price patterns is and makes sure that all major ones approach a 50-50 probability. That is quite an interesting topic I have not elaborated on a lot, but it is not super complex neither.

If one performs a long-term test of “patterns”, such as head-and-shoulders, flags, penants etc. one will indeed find that the mode price data is added, the more the accuracy of any of these approaches “randomness”. So whether there will be a “bullish” or “bearish” breakout. It depends on the DM positions (and stops etc.).
However, what is impressive is that such components are incorporated in addition to the main principles. Previous tick data is always incorporated by the algos.

“I mean, are the markets intrinsically fractal and manipulated or fractal because they are manipulated?”

Hi Shalva,

this question shows that you thought deeply about the MK, well done!
I am surprised that this was not asked earlier.
So this would be my answer:

It is a bit of a “egg-chicken-egg” situation. Around 70 years ago, when the markets were not manipulated (in the same way) as today, the price action used to be (multi-)fractal.
The reason for that is that out of the “chaotic” process of financial markets, some “self-organizing” order established itself in form of fractal properties.
The price started to get “self-affine”, to show volatility clustering and to even have “long-term memory”. That is often the case when you have a system that is first unorganized and chaotic, but then “settles” down on such properties (i.e. see examples from nature, such as plants, organisms, etc.).

Now,
obviously, the SM Algos took all that into account and incorporated that “fractality” into their “market making” mechanisms. That in itself was not complex; as we know, some Dm accumulation on one time frame will impact all others etc.
Also, remember that the fractality itself has nothing to do with “direction”. For example, a pattern which breaks either to the upside or to the downside can of course be fractal in both cases.

So the answer is yes. First markets were fractal, then at a later stage (when the algos took over the game), that fractality was continued.

D

“Hi there, thank you, you are really good at crunching data and this is an extremely interesting.”

Thank you, Shalva.

“It’s so amazing that you’ve mentioned market’s “long term memory”, clustering and “self-organizing” as that’s how anything would’ve been created in the first place including ourselves. ”

That is exactly right.

“I would argue actually that fractality has nothing to do with the direction of the market since I have this Fourier extrapolator indicator and sometimes, when it predicts a very steep move in either direction and that direction coincides with other currency pairs within a day or two the price is extremely likely to spike (though not before it moves in an opposite direction).”

Yes, if you like, post it in the forum.

“The smart money boldness concept to me really is just them taking what was already there, continuously reiterating it to fit the manipulator’s agenda and presenting it as the original ”

That is correct.

“The greatest enemy of knowledge is not ignorance, but the illusion of knowledge”

Exactly.

In that sense, the market is an ever-evolving (multi)fractal.
That is the best “mathematical” description I guess.