Table Of ContentFRACTAL
ENERGY TRADING
Four Simple Rules to Profit in Any Market &
Any Timeframe
Authored by Doc Severson
Fractal Energy Trading:
Four Simple Rules to Profit in Any Market & Any Timeframe
Copyright ©2020 by Doc Severson. All Rights reserved, including the right to reproduce this book,
or portions thereof, in any form. No part of this text may be reproduced, transmitted, downloaded,
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purchase only authorized electronic editions and do not participate in or encourage electronic piracy
of copyrighted materials.
The material in this book is for educational purposes only. Doc Severson and Hampshire & Holloway
LLC or any other agents or employees are to be held harmless against any civil actions are we are not
acting as brokers, advisers, or registered agents. Any material or contact with the firm or its agents is
not to be construed as investment advice or solicitation for funds. Trading involves risk. Trading in
stocks, options, commodities, cryptocurrencies, and other derivatives is risky and subjects you to risk
of losses that can be potentially greater than your initial investment.
The material written by Doc Severson is not a substitution for obtaining professional advice. None of
the employees or agents are acting as agents, mental health care professionals, accountants, or lawyers.
Doc Severson recommends that you obtain advice from professionals in their respective fields before
making any trading decisions. Any past results mentioned are not indicative of future performance,
and the material is for illustration and informational purposes only.
To make all of the attorneys really happy, we should state that no one involved with the production of
this book has a clue as to what is going on. Doc Severson, Hampshire & Holloway LLC, and everyone
else involved with this project are raving lunatics and listening to us would be the least intelligent
thing that one could do. That should just about cover everything.
Cover stock image via Adobe: Image ID: 284049466
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ISBN-9781079277944
Dedication
This book is dedicated to my father Allan for taking the ultimate risk as a
young man so that the rest of us had the freedom to pursue opportunity. Lib-
erty is a very powerful concept and one that he fought for with his life.
This book is also dedicated to my mother Charmaine who understood at an
early age that opportunity cost was defined by “staying put,” that not having
the freedom to express one’s talents was akin to imprisonment, and that tea
must only be brewed whilst boiling.
TABLE OF
CONTENTS
Section One: Getting Ready to Get Ready 1
Preface 3
How to Use This Book 5
Section Two: What is the Problem We Need to Solve? 7
Chapter One: The Retail Trader Struggle 9
Chapter Two: Why Does Price Move? 27
Chapter Three: Markets Mimic Nature 35
Section Three: Price Action and Trends 47
Chapter Four: Introduction to Price-Based Analysis 49
Chapter Five: The Tides of the Market 59
Chapter Six: Single Timeframe Price Trends 79
Chapter Seven: Fractals and Financial Markets 93
Chapter Eight: Trading Price Fractals in Five Steps 111
Chapter Nine: Fractal Price Action Setup Examples 121
Section Four: Market Energy 133
Chapter Ten: Introduction to Market Energy 135
Chapter Eleven: Market Energy and Trends 149
Chapter Twelve: Fractal Energy Trading 167
Section Five: The Four Major Rules of Fractal Energy 179
Chapter Thirteen: Building a Fractal Energy Trading System 181
Chapter Fourteen: Rule Number One 187
Chapter Fifteen: Rule Number Two 193
Chapter Sixteen: Rule Number Three 199
Chapter Seventeen: Rule Number Four 203
Chapter Eighteen: Using the Four Major Rules with Your Trading 209
Section Six: Fractal Energy Trading Applications 215
Chapter Nineteen: Directional Trading Applications 217
Chapter Twenty: Non-Directional Trading Applications 229
Chapter Twenty-One: Fractal Energy Trading Scans 239
Chapter Twenty-Two: Final Thoughts/Next Steps 245
Section Seven: Appendix 249
Appendix I: Trading Maxims 251
Appendix II: Indicator Code 253
Appendix III: Charting/Photo Credits 257
Appendix IV: Disclaimer 259
Appendix V: About the Author 260
Section One
Getting Ready to
Get Ready
PREFACE
With a tip of the hat to Simon Sinek, I need to give you my “WHY?” for
writing this book:
“Is the price going to go up or down from here on this stock/cryptocurrency/
asset?”
I cannot count how many times I’ve heard this question. And to be fair,
this is a question that I sought the answer to on everything that I traded when
I began my retail trading career. Knowing what’s “supposed to happen in the
future” carries a certain amount of comfort and certainty, yes? It implies that
you’d enjoy better performance if you just “knew” what was about to happen.
There’s a certain irrationality that comes with thinking that someone can
predict the future. It’s often not until several years (and several thousand dol-
lars of “lessons”) that one finally accepts the truth that anything can and often
does happen on day +1…or in the next minute.
No one can accurately predict the future, nor the forward/future pric-
ing of any financial asset.
That doesn’t stop the retail trader from seeking this answer; in the back
of their mind, they feel that someone has the answer. And it usually starts with
Fractal Energy Trading
a pundit flipping a coin and picking a direction, accidentally getting the pre-
diction correct, and then trumpeting on social media for all to hear that “they
called the crash/rally/consolidation/whatever.” That sort of public chutzpah
makes an impression on an inexperienced investor, and it might cost them a
good part of their risk capital before they uncover the folly.
Once a retail investor latches onto “their” guru, the confirmation bias
kicks in which creates a polarizing filter that prevents any disparate informa-
tion from hitting their consciousness other than the prediction that the guru
has provided. That leaves at least a 50% probability that they will be wrong,
triggering the usual cries of betrayal and outrage.
We really make it so difficult on ourselves due to our human tendencies.
In this book, therefore, I hope to show you a way to put those “tenden-
cies” in your favor by giving you a logical and systematic method for analyz-
ing any financial market and discovering the structure that lies within. This
structure is there regardless of whether we’re looking at Stocks, Bonds, Futures,
Cryptocurrencies, or anything else that offers price discovery through a public
market.
That’s my “why.” Let me show you how.
Doc Severson
Greenville, SC
February 2020
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