An Autonomous Agent

exploring the noosphere

Category: wave theory

The Misbehavior of Markets: A Fractal View of Financial Turbulence – Benoit Mandelbrot

I’ve been wanting to read The Misbehavior of Markets: A Fractal View of Financial Turbulence by Benoit Mandelbrot for a number of years. Mandelbrot helped to change the way people view financial market dynamics. This book is definitely a must read for people working in the financial industry. However, Mandelbrot was not the first. It is a little surprising that Mandelbrot did not talk in detail about the work of R.N. Elliott or Robert Prechter, among others, which I think complement Mandelbrot’s work on financial fractals. Patrick Harris wrote a short paper discussing whether Mandelbrot should have cited Elliott (link to paper).

To me, the idea of infinite memory processes is one of the most important concepts touched on by Mandelbrot in this book. It suggests that economists and traders should be developing models and theories which value the importance of price series and data going back decades. And it makes sense to me that people and prices do not change their fundamental behavior over extended periods of technological evolution. However, I suspect that organisms do change their fundamental behavior if the time horizon is thousands or millions of years. I am very curious to read more about Hurst’s studies of the Nile.

Socionomics: The Science of History and Social Prediction – Robert R. Prechter, Jr.

I posted before about the Elliott Wave Principle and several books dealing with the subject. However, I feel the need to reiterate the importance of two books by Robert R. Prechter, Jr. They are: The Wave Principle of Human Social Behavior and Pioneering Studies in Socionomics. I purchased both these books in a two volume collection called, Socionomics: The Science of History and Social Prediction. In all my studies as an undergraduate and graduate student in the field of finance and mathematics, not one professor has ever mentioned Prechter or Elliott.

The Elliott Wave Principle


In the financial industry many models are based on Geometric Brownian Motion. However, these models tend to be inadequate and breakdown when the assumptions are violated. Searching for better stochastic models to model the market, I recently ran across an interesting topic in the field of market prediction and structure — the ideas of Ralph Nelson Elliott. It is remarkable that his ideas of market waves and structure were formulated in the 1930’s.  His ideas were popularized by Robert Prechter who has numerous books and articles written on the subject. In this post I have introduced these ideas and will post all the articles and books I have and will read on this subject. I hope to develop these ideas further.



Harmonic Elliott Wave: The Case for Modification of R. N. Elliott’s Impulsive Wave Structure – Ian Copsey

Mastering Elliott Wave Principle: Elementary Concepts, Wave Patterns, and Practice Exercises – Constance Brown

Elliott Wave Principle: Key to Market Behavior

The Wave Principle of Human Social Behavior and the New Science of Socionomics


An Introduction to the Elliott Wave Principle – Jordan Kotick

Multi-classifier based on Elliott wave’s recognition

Fuzzy time-series based on Fibonacci sequence for stock price forecasting

Elliott Wave Theory and neuro-fuzzy systems, in stock market prediction: The WASP system

Unconscious Herding Behavior as the Psychological Basis of Financial Market Trends and Patterns


Mastering Elliott Wave – Jamie Saettele

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