introduction to equilibrium Fractal Wave Analytics)

EFW Analytics relies on the principle “We commerce because there are patterns in the monetary market”. EFW Analytics is a set of tools for enhancing trading efficiency by detecting repeated fractal geometric patterns in the monetary market (the fifth blueprint). EFW Analytics is one of several tools that encourage trading logic without the need for testing on background. The instrument consists of 3 parts:

• Equilibrium Fractal Wave Index – the index of the equilibrium fractal wave. A research tool to support trading logic
• shape Ratio Trading platform – a shape factor. Trading system 1
• Equilibrium Fractal Wave Channel – an equilibrium fractal wave channel. Trading System 2

The index is an analytical tool. It is used in the same way as the Hurst exponent, named after Harold Edwin Hurst (1880-1978), and the fractal dimension introduced by Mandelbrot in 1975. The EFW index helps to confirm the presence of equilibrium fractal waves in the financial market. However, the index of equal-size fractal waves is more practical and intuitive when trading compared to the above. The index value varies from 0.0 to 1.0 or more. The higher the value, the more significant the presence of a certain form of the equilibrium fractal wave. If the index is below 0.2, the form factor can be ignored when trading.

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The first method of using equilibrium fractal waves in trading is the form factor. Its use is similar to trading on Fibonacci levels or extensions. But there are a few differences. When trading on the form factor, we do not limit ourselves to just the Fibonacci coefficients. In addition, we do not take for granted that each coefficient will behave the same regardless of the financial instrument. With that said, the coefficients are selected using the EFW index.

Using the EFW channel is not difficult. You can use the proportional trigger method described in the book “Financial Trading with Five Regulations of Nature: Scientific Guide to Price Action and Pattern Trading “(Trading in financial markets using five natural laws: Price movement and Pattern Trading”, 2017, Yang Ho Seo).

The following modes are available:

• Shape trading ratio – the aspect ratio
• Equilibrium fractal wave channel-an equilibrium fractal wave channel
• Shape ratio trading Equilibrium fractal wave (EFW) channel
• Shape ratio trading Price Breakout Pattern Scanner
• Equilibrium fractal wave channel Harmonic Pattern Plus (or Harmonic Pattern Scenario Planner)
• Shape ratio trading or EFW channel Mean Reversal Supply Demand
• Shape ratio trading or EFW channel Elliott Wave Trend

The indicator allows you to select up to three coefficients of the form for trading. Some important input parameters are listed below.

• Set false to switch off EFW Channel-if false, disable the EFW channel
• Timeframe to detect patterns – timeframe for detecting patterns 
• Max number of patterns to display – the maximum number of patterns to display
• Pattern Index – index of the initial pattern
• Trigger Margin for channel-width of the channel trigger value
• Trigger Margin for Shape ratio-the width of the trigger value when trading on the shape coefficient
• Enable sound alert – sound alert
• Send an email if a pattern is found – notifications by e-mail 
• Send notification if pattern is found-push notifications
• Use white background for chart – if false, the black background of the chart is used
• Amount of bars to scan for pattern search – the number of bars to search for the pattern
• Pattern Update Frequency – the frequency at which the pattern is updated
• EFW Index Period – the period for calculating the EFW index
• Shape ratio 1, 2, 3 – shape ratio (0.1-1.0)

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