Fractals Basics Explained in Depth | Russell Capital Gr… — Transcript

Back to another video. So, this is like a one-shot to the fractals. I'm going to explain almost every single thing inside of the fractals. Not in proper detail, but I'm going to be explaining them in a proper way so that you actually have a proper idea of how you're supposed to use it.

way that you actually have a proper idea that how you're supposed to use it.

Okay? Like this is the fractal chart. What you see right here are three important things. Okay, first one is the pivot, then is the vector, and then is your probable band. First of all, the pivot. So pivot is like a neutral line.

Okay, pivot uh indicates neither bullish nor bearish. Above the pivot is actually bullish. Below the pivot is actually bearish. As simple as that. Then we have the vector. The vector is the purple line. If the market is below the vector,

Okay, pivot indicates neither bullish nor bearish. Above the pivot is actually bullish. Below the pivot is actually bearish. As simple as that. Then we have the vector. The vector is the purple line. If the market is below the vector,

as a support. As simple as that. Then you have the probable band. So probable bands are actually you know like um the probability of actually reaching that particular level like right here we have the 20% band uh at around

the vector acts as a resistance. Like right here, you can see the rejection from the vector, right? And then above the pivot too, you can actually see the support from the vector. You know, when the price is above the vector, it acts

transitioned below the pivot right the market transition here uh at the beginning of the new session which is marked by yellow it transitioned below the pivot leading to a uh new session also and then we can see right here that

as a support. As simple as that. Then you have the probable band. So probable bands are actually, you know, like the probability of actually reaching that particular level. Like right here we have the 20% band at around

pivot, it is a bearish target. If the open state is above the pivot, it is a bullish target. Okay? You can also use the probable bands as your targets. Now, inside those probable bands, you see those black imprints. What do they

471.77. So that indicates that there is only a 20% chance to actually reach that price in that particular cycle. What do I mean by cycle? Basically, when the market transitions, it marks a new cycle. Like right here the market

Okay, like right here, you see this L26 right here. Okay, I'm going to explain what is L26 actually. But you see this low right here and if you follow that low to the right hand side, you can actually see the uh black. Okay, this

transitioned below the pivot, right? The market transitioned here at the beginning of the new session, which is marked by yellow. It transitioned below the pivot leading to a new session also, and then we can see right here that

actually give you that particular level. Okay. Then the question comes that how this L26 that you just saw right here actually formed. Okay. I want you to to just you know like take a look at one important thing right here. Okay. You

it led to a new cycle. That also led to the closure of the open states. Now, what is open states? Okay. Now, open states are basically targets. As simple as that. Open states can be used as a target. If the open state is below the

like right here the market transition here it led to the formation of L1. Now let's say the market actually formed a new low uh below that L1. So that led to the formation of L2. Now right here you

pivot, it is a bearish target. If the open state is above the pivot, it is a bullish target. Okay? You can also use the probable bands as your targets. Now, inside those probable bands, you see those black imprints. What do they

Okay, H means high, high one. And then we saw another high leading to the formation of H2. That's all. Okay, let's just use another example for more clarity uh about the fractals. Okay, again the pivot is the neutral line. Above the

actually mean? So, basically, all these black imprints you see right here are the previous supports and resistances.

band whenever the market gives a transition. Okay, same as for the 50% band. There's 50% band to actually reach uh there's actually 50% chance to actually reach this band right here when the market transitions below the pivot.

Okay, like right here, you see this L26 right here. Okay, I'm going to explain what L26 actually is. But you see this low right here, and if you follow that low to the right-hand side, you can actually see the black. Okay, this

You know for the past two days we have been seeing that these all these staged open states are being you know like uh taken out like right here the market took out three targets and then yesterday because of such a great bull

black line right here, that is a support. You know, like in your normal charts, you mark out support and resistances on your linear chart. You know, this is similar to that. But here there's a lot of math and calculation used to

actually uh you know reach that particular level. Then why did the market reach it? Sometimes the market may try to go against the odds. You know this doesn't mean that it does not work.

actually give you that particular level. Okay. Then the question comes, how this L26 that you just saw right here actually formed. Okay. I want you to just, you know, take a look at one important thing right here. Okay. You

Okay. Then then the next thing we need to talk about is again the vector. Below the vector is actually resistance. Above the vector is actually support. Like right here if I zoom in into this chart, you can see you know the market is

see all these candles? You know, these are like normal candles, but when the market transitions, it actually marks a new low.

That's all. So you know like that is how simple it is. Okay. Now you must be wondering that okay so how is the value of the pivot and the vector uh decided?

Like right here, the market transitioned here. It led to the formation of L1. Now let's say the market actually formed a new low below that L1. So that led to the formation of L2. Now right here you

Okay. I'm just going to you know rewind the price action a bit to actually give you the idea that how it's actually formed.

can, you know, if you count the number of aggregations right here, it's going to be 26. That is why this is L26. You know, like right here we saw the cycle above the pivot and then we saw H1.

It's 492.49. So the last vector value above or below the pivot before the transition actually is the value of the pivot whenever there is a transition. Okay, like right here you you just saw it right if I go back again 492.49 that was

Okay, H means high, high one. And then we saw another high leading to the formation of H2. That's all. Okay, let's just use another example for more clarity about the fractals. Okay, again the pivot is the neutral line. Above the

Now this is the same for every single chart. Okay, these are the basics of the fractals that you need to understand.

pivot is actually bullish. Below the pivot is actually bearish. Okay, then we have the probable band. Like right here, this is the 80% probable band, which means there is an 80% chance that the market actually reaches this probable

to actually just move on inside of the fractals. Then we have the wave number.

band whenever the market gives a transition. Okay, same as for the 50% band. There's a 50% band to actually reach. There's actually a 50% chance to actually reach this band right here when the market transitions below the pivot.

transitions there are. Okay, like let's say we are at wave 7 60 minute aggregation. So basically this is an hourly time frame. Okay. And there's 50 days to load. Basically this is the data of 50 days. And you know I can actually

Okay, same as for above. For example, let's say the market transitions above the pivot here. So there's an 80% chance that the market actually reaches this price point. Okay, as simple as that. Then also we have the open states.

whenever the market is you know like around the 20% band cuz like that's considered outliner you know and then you need more support and resistance levels depending wherever the market positioning is. Okay. Okay. Again coming back to the wave number let's say that

You know, for the past two days we have been seeing that all these staged open states are being, you know, taken out. Like right here, the market took out three targets, and then yesterday, because of such a great bearish move, we actually took out the open state in the 10% band, indicating that there was only a 10% chance, sorry, to actually reach that probable band. Okay, I know that you must be wondering, there's only a 10% chance to

seven you know you see many many transitions above and below the pivot okay market is moving like a zigzag right here but if I move to the wave 50 you know you can just see the number of transitions actually just decreased but

actually, you know, reach that particular level. Then why did the market reach it? Sometimes the market may try to go against the odds. You know, this doesn't mean that it does not work.

we can see right here okay now this is you know very neutral amount of data you know this is like very uh basic to understand I guess and you know like wave 7 60 minute wave 10 15 minute wave

You know, like we cannot read a person's brain to actually understand what they're trying to do. Okay, we can only, you know, find out different levels and also give us the best edge in the markets.

know, like make your decision inside of the markets. And personally, I use these time frames like right here. You can, you know, if you want, you can just copy them. And yeah, basically, these help me a lot. And then the next thing I'm going

Okay. Then the next thing we need to talk about is again the vector. Below the vector is actually resistance. Above the vector is actually support. Like right here, if I zoom in into this chart, you can see, you know, the market is

Okay, wave 10 I'm using. Okay, now if I reduce the wave number. So what happens when we reduce the wave number? The number of transitions increase. Okay, but I'm going to stick to 10 right here for explaining.

taking support. You know, like look at my cursor. The market is actually taking support from the vector and then transitioning above the pivot leading to the formation of a new cycle. Right.

odds, you're going to see right here marked in red. You know, you can see the odds of L26 forming is just 17%. Now, what does it actually show you? It shows you that the probability of forming L27 is actually less than

That's all. So, you know, like that is how simple it is. Okay. Now you must be wondering, okay, so how is the value of the pivot and the vector decided?

just subtract 100 minus 17 and you know just get the odds for the H1 or even L1 if the market is above the pivot like right here let's just suppose that the market is at H8 and there's only uh 36

We cannot know how the value of the vector is decided, but we can know how the value of the pivot is decided.

is how you can actually use the options analyzer. There's one more thing right here that is your histogram. Now if I click on sort histogram, you can see it just you know like um orders all of these highs and lows according to the

Okay. I'm just going to, you know, rewind the price action a bit to actually give you the idea of how it's actually formed.

2% band to actually achieve that price showing that this is outlier okay and right here you can actually see that it is also indicating the same thing now if you actually see above the pivot too know like this is the pivot same as the

Right here. Okay, perfect. Like right here, you see the vector value? It's 492.49. Just as I move, one more thing, you can see right here we saw a transition. Now look at the pivot value.

Here perfect. So H12 is actually the highest in the 5% band region showing that this is a outlier move. Perfect.

It's 492.49. So the last vector value above or below the pivot before the transition actually is the value of the pivot whenever there is a transition. Okay, like right here you just saw it right? If I go back again, 492.49, that was

can actually just check it out and it is perfectly explained by him that how you can actually use the ceiling floor and the PML to actually give you a daily range that the market will move in.

the last value of the vector. Now just as we are going to see the transition, the value of the pivot is going to change to 492.49. Done. So you can just see right here the pivot value actually changed.

Now inside of the graph settings we have way too many features but I'm just going to be explaining the simple ones and the ones that you know you're going to be needing when you are starting using the fractals. Okay. So here we have the

Now this is the same for every single chart. Okay, these are the basics of the fractals that you need to understand.

all of these peaks that are forming you know like these are balls that the price that these are actually showing that okay if the market reaches the ball price for example we have a ball at P4 uh79 showing that the market makers are

The open states, the probable bands, your black imprints, then your transition above or below the pivot, the pivot, the vector. Okay, these are basic things that you develop an understanding for. You can, you know, find it easy

imprints and these green peaks like right here we have a peak at P49 uh C490 I'm sorry. So that indicates that this is a resistance. Market makers are not going to like to actually let that contract in the money. This is a POI,

to actually just move on inside of the fractals. Then we have the wave number.

feature that is the wave analysis. Basically, now here, if I click on the projection of waves, you're going to see way too many waves right here. So, what do they actually mean? Okay, let's move on back to the wave

For the wave number, there's a simple, simple rule. The higher the wave number you use, the lower the number of transitions there are. Okay, the lower the number of, like the lower the wave number you use, the higher the number of

curvature or reverse from this curvature. And then the next thing you are seeing right here is this blue line or blue wave. Now what is that? So basically this is the mean weight. Now I hope that it's understood that what's it

transitions there are. Okay, like let's say we are at wave 7, 60-minute aggregation. So basically this is an hourly time frame. Okay. And there's 50 days to load. Basically, this is the data of 50 days. And, you know, I can actually

great tool to actually tell you the fear inside of the market cuz like whenever the mean wave is like near the 20% band 10% band it indicates downside fear.

increase the number of days. For example, this is 100 days of data. Okay. Now that is your choice whether you want to use, you know, like 50 days of data or 100 days of data. I use the 100 days

we're going to be talking about is your color scheme. Okay like we have three color scheme. This is the dark one. This is the bright one. Okay. No one really uses the bright one cuz like it's going to hurt your eyes a bit. And then we

whenever the market is, you know, around the 20% band because that's considered an outlier, you know, and then you need more support and resistance levels depending on wherever the market positioning is. Okay. Okay. Again, coming back to the wave nu

we're going to be talking about, all of these are actually just explained in the five part video I uh five u part playlist I actually made on the graph settings. You can just check it out.

also uh share the link inside of the description and you know like I I have already explained all of these important tools in proper detail. Okay. Then the next thing we uh we can talk about is this thing right here that is

your standard deviation. Okay. Before we start with the standard deviation I want you to take a look at the macro trend.

You see the macro trend it is red somewhere it's green and you know like it just keeps on fluctuating between green and red. What does that actually mean? Whenever it's red it means bearish bias. Simple. That's all. Whenever it's

green it's uh shows bullish bias. Simple. That's all it's trying to show. And whenever now coming to the standard deviation, whenever you see that the market is actually in the standard deviation squeeze, it means that the market is actually preparing for a some

sort of explosive move. Basically, a volatile move indicating that there's going to be a higher volatility inside of the market. Very recent example right here. You see that the market is actually in the squeeze right here, right? And then you can see because of

that particular squeeze we actually uh saw a change in the macro trend leading to the bearish macro trend and such a great move leading to the closure of two open states. What are open states? These are targets. Remember I hope so you

remember that cuz like we talked about it 10 minutes ago and then again we're going to be coming back to the graph setting. I want to explain just one thing about it and then we're going to move to the spread monster which is one

of the most famous tools inside of the practicals. Okay, here we have the show cycle analysis. Now cycle analysis is very much related to the uh wave analysis that we have and these two are pretty much correlated. Now I'm going to

I'm going to explain that how they're actually correlated inside of the fractals. Okay, what do you see right here is peakto peak move above the pivot right like right here it's a peakto peak move from H2 to this H2 so this H peakto

peak move is actually marked right here okay what does the cycle analysis do it counts the number of aggregation from peak to peak that's all I hope that it's understood that what I actually mean like right here it counts the number of

aggregation from this H12 to this H130. Okay, you can see you know it's marked right here. Okay, so it's actually showing you that there are actually 22 aggregation between this cycle and in that very cycle you can actually see the

small macro trend for that particular cycle from peak to peak and below the pivot it's trough to trough like right here we s uh we saw a cycle from L2 to L26 it's marked right here and the number agation were actually 36 okay

then it actually also shows show you the average number of cycles above and below the pivot too. Okay, so again this can be useful to indicate fear. Okay, for example, if you see that below the pivot the average number of cycle is actually

40 that indicates that there's a more pish trend and above the pivot is just 30. So that indicates that there's not bullish trend. Same can be used for the wave and the waves. If all of the waves are you know like major uh waves are

actually you know below the 50% band and also the mean wave is way much way too much below the 50% band that indicates fear for the downside. I hope that it's pretty much understood what I'm trying to show right here. Okay, these are

pretty basic things that you need to understand about the fractals. Uh then only you know you will be able to perfectly you know use all of these for your personal analysis. Then comes the spread monster. For the spread monster,

we already have a video on it, a dedicated video on it, and I've explained it way too many times. Okay, but uh for just a bonus, I've actually prepared a video that how you can actually use the spread monster for

plotting out different levels. What is spread monster? Spread monster all about levels and odds. For example, you see a plus, you know, like um in the fractals, you know, like wherever these black imprints, you know, like uh just come

very close to each other and it forms a black area, that is a cluster. Okay? And inside of the spread monster 2, there's a way to identify all of those clusters inside of the density chart. Okay? I hope that you know you have already

watched the spread monster video that we made. uh this is that is a dedicated video that I explain about the volatility graph, the density and the odds graph. But in this video, you're going to see that how you can actually

you know just use the spread monster to plot out different levels and even plot out the odds. So yeah, let's go on to that video. Hi uh welcome back to another video. So in today's video I'm going to

be telling you that how you can actually use the spread monster to plot out different levels or even areas that the market can reverse from. The first one we have the historical volatility projection graph or the volatility graphs. And so on this one we have four

important levels. The first two are the medians the yellow ones uh which uh for which we have 90% odds that either of the medians are hit. And then we have the walls. there's only 25% probability to break those walls. Okay, so we have

four of these important levels and then we have the density graph. Now density graph is uh a bit difficult to understand that what's really going on in here. So basically wherever you see those curvatures they represent important reversal levels like above the

previous day close. This is the previous day close for Tuesday. So today is Wednesday. So we see that all the curvatures above the previous day close are resistances and below are of course support. Now how you can actually use

this to your benefit to actually plot out different levels. You can you know just look at the cluster wherever you see the cluster of the waves that represents a strong reversal area like right here from 476.92 to uh 477.46 that is a cluster.

So that means that it can work as a important resistance. Same is for below the previous day close. Now coming to the odds graph. With the odds graph we have the frequencies. Okay. So with the frequencies basically wherever the

frequency goes flat that marks has an important level. For example here the frequency goes flat. That is an important resistance. You can just mark it on your chart and it will work. Of course it work because you guys know

that the chart I share is made from all of these charts. Okay. So I've been back testing uh for the past three months now and I've been finding it like great success with it. And there's one more thing that I have noticed that is the

the cluster of all these probabilities like right here you see these uh this cluster of the probabilities that is forming here that marks as a POI.

Similar thing right here. Okay. So wherever you know these numbers are getting you know cluttered that means that it is it marks as a POI in the past 200 days of data or whatever amount of days of data you are actually using.

Okay and you can you know just for today you can actually just see my chart that I actually plotted on to. So basically what I did is that I used uh the spread monster. First of all, we have the

volatility graph to plot out the medians and our balls. And then I use the uh sinosodial graph or the spaghetti graph to actually plot out different clusters that you see right here marked with gray. Okay. Now, you must be wondering

what is this uh pink box. Basically, this is the pivot. Now, there are two ways to plot out the pivots. I'm going to be talking about that very very soon.

And then you must be seeing these lines. So these lines are actually derived from the uh odds graph where wherever I saw that okay the frequency is going flat that can works as a work as a resistance or support. So that is how I used the

three graphs and there's just one more thing about this spread monster that is the stat. Now stat you can basically use that how much uh what is the probability uh for breaking a particular level. For example the probability to break full

76.97 is just 32%. and you can see the count for it. Okay, so this is how it works and basically all of the charts that you have already seen on my trading view and these are all plotted with the

spread monster. Now with the spread monster you have two options. First one is that you can actually plot out what I'm doing the historical data or you have then you have the uh implied volatility basically IV you know big

talks about it all the time and basically if I go to the density graph and click on the 19th March contract and click on show strikes I have the IV now using the IV we have already made a

video you can actually mark out the peak IV and then the IV balls. So basically they work as the same as like support and resistance levels. Basically peak is kind of like a pivot. If the market breaks it, there's a higher probability

that we can see the IV ball. This is for either of the directions above or below the IV peak. Okay. And then there's just one last thing about the pivot that uh for its formation basically uh using the

spread monster using the odds graph we have the intersection. You see these two frequencies right here. That works as a pivot. That's all. So basically using the whole spread monster tool. You don't need to look at anything else in the uh

fractals. You can, you know, just simply use the spread monster and plot out charts for yourself. Simple. And you saw the that pink box right now. You must be wondering where that came from. So I use the mm dead zone for uh plotting out

basically my um pivot on my graph and let me just load it. Okay. So here we have the mm graph loaded. Okay. Wherever you see the yellow area that is the mm dead zone. In that zone the market

makers make the most amount of money. And this is for the overnight. So this can work as a pivot. So there's a simple rule about the MM dead zone that we have been noticing. The overnight mm dead zone works as a pivot and the intraday

mm dead zone works as a magnet. Okay, so we have a simple pivot. Now we all have all our levels. So basically it's all sorted out now. Okay, you also have the stats using the statistics inside of the

spread monster. So here's how you can actually, you know, use the spread monster or the mm data to plot out your charts on your trading view or to. So yeah, have a good day.

Now I hope that the video actually made a lot of sense to you that how you are supposed to use the spread monster for uh for plotting out different levels as well as finding out different dots for particular levels. Okay. Now there's

just one last thing that we need to talk about that is the IV the IV data that we have inside of the fractals. But right here you see that the number of waves right here the density graph is not very

populated. Now this is pretty bad for plotting out your even IV. Why? because there's not even data that the market can you know like the fractals can use to actually different levels you know like the market is currently at three

you know like L3 and for a such a low number uh of like such a low number of wave and where we we see a lot of number ofations this is pretty high number for the low okay you know in the wave one or

the lower V number we see a lot of transitions so of course that we cannot you like expect L26 or H26 like that.

Okay, like very small uh changes in the frequency actually just leads to a transition just like that. Okay, so L3 is considered a pretty outlier move and we are of course going to see lower amount of L3s in this 200 days of data.

So I'm going to increase the number of days of data. Let's say I'm going to increase it to 2,000. Okay, so this is 2,000 days of data right here loaded in front of you. Okay, now if I go to the

spread monster now and click on the density chart, see my data is all populated. Maybe I've used a little bit more number of uh like number of days of data. So if I reduce it to let's say a,000 1,000 sounds right or even 500,

it's going to make sense. Okay. Now if I go to the density chart here you can see the data is again populated. If here you know like you know in the count on the right hand side if you see that the number of data is

actually above 80 that means that you're using the right number of days to load and that can give you the idea that okay so this is the time frame I can actually use to plot out my different levels. So

for the IVs, we already have a video made by for the weekly and the daily IV.

You can just check it out inside of the fractal in the in the RCG YouTube channel.