Abstract

Long term study of trends on price charts using specially developed software, has shown that prices do not change direction at random; instead, prices display a distinct preference to change trend or direction at points on the price chart which correspond with a distinct preference for certain gradients.By itself, a preference for certain gradients does not prescribe future behaviour tightly enough to be of great value to the technical analyst. However, the presence of other, more complex structures on price charts reveals an underlying symmetry in the behaviour of the price that can be used to anticipate future price behaviour.This paper summarizes the more pertinent results of this phenomenon. Some examples are given to illustrate how in knowledge of the ground rule and of the higher order symmetries can be used for trading decisions.The findings presented here do not agree with elements of the Random Walk Hypothesis, but support the concept of emergent order implicit in complex adaptive systems.