Chaos Theory Revisited

[Wysiwyg]

Appeciated that yarn eladamine.

The simple triangle is a break in proceedings.Like a steam train slowing down for disembarkation/embarkation.A gradual calmness envelops the train until it is time for movement again.All aboard she said.

At the start of the triangle are profit takers from the recent trend who leave content, followed closely by new buyers wanting a continuation of trend.The numbers of buyers and sellers at this point become relatively even.With a trend continuation not likely (lack of interest, fear, greed, accumulation, distribution, uncertainty) the trading range narrows over an indeterminable time frame.Hence forming a triangular shape.

There is the triangle with (comparative) neutrality,the triangle with bullish bias and the triangle with bearish bias.There is only three ways on my charts ... generally upwards, generally downwards and generally sideways.

 

[eladamrine]

That assumes that people act rationally, that they act in accordance with the information they are given and their personal values of being either risk adverse or risk loving. But i guess what the chaos theory says we never know that people will act rationally, that there might be some extreme coincidence when everyone who sells still sells but those who are counted on to buy does not buy even though it would be sensible to do so. For example say every buyer counted on to buy got struck by some epiphany contrary to market conditions, that the market is unsafe and were deterred off buying. Then what happens? Of course it would require a coincidence of a high magnititude. It is possible but highly unlikely. Hmm...but thinking now it would be impossible because people are incapable of acting irrationally and never to a degree that involves a significant enough portion of the population. Again it is possible, but highly unlikely.