The purpose of this series of articles is to explain the basics of chaos theory for the average trader. Before beginning, let me differentiate between trading and investing. Investors shop for value. They typically use a buy and hold approach. They are buying something, like a stock, and holding it for the long term.
Trades take the approach that timing is everything.
They will buy and sell for short term gains based purely on the price action. Traders are shopping for volatility. To be a successful trader, one needs four things. First, one needs to understand how markets behave. Second, traders needs to understand how they themselves behave, because trading is particularly susceptible to human emotions.