Reply To: Are smart money algorithms run on a quantum computer?


“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.).

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.


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