One thing that caught my attention and the attention of a colleague of mine that I've been

working with was the work of Benoit Mandelbrot, fractal geometry. And there was a book came out

in the early 80s, I think, the fractal geometry of nature. And it was apparent from reading this that this had

application to modeling the markets. In fact, Mandelbrot's first paper that he published was on

the cotton market. And that sort of, that introduced the world that was in compilation by Paul Kootenar called the random character of stock market prices.

That really was the beginning of Mandelbrot's career in fractal geometry.

And of course, sometime later that we picked up on this, but we could see from this that it was applicable.

And of course, another approach that was also popular at the time was the Elliott Wave.

Robert Baxter had really developed a reputation by his work in that regard.

And so one of the things we were looking at is because the Elliott Wave is obviously

a fractal kind of approach where you have patterns within patterns, within patterns.

We thought, well, gee, I wonder if it would be possible to automate the Elliott Wave.

Well, the short answer is no, and the reason is simply that if you have the kind of restrictive

conditions that are invoked by the Elliott Wave, the market won't cooperate.

So you've got to do a lot of, you've got to essentially shoehorn the data into the model.

What I found, or what I found is that it was better to shoehorn or to

devise a model that fit the data. And what came out of that was what we designated the fractal

wave algorithm. And the fractal wave algorithm is essentially a method of deconstructing prices into a series of fractal patterns.

And once again, it's self-similar across scale, meaning that you have a short-term pattern that can be combined into a longer-term pattern, which can be combined in a longer-term pattern,

etc., all of which have the same shape. And in fact, the basic, the underlying pattern is

what we call a zigzag, which is merely the price goes up, the price goes down, and then the

price goes up again. Or there's one in the opposite direction, of course course and you can then put these zigzags together

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