Part IV. More About Fractals. Commander in Pips: I’m in a hurry to announce that this part will be short and easy. I think that you are a bit tired from lot of different material and advanced talks. Pipruit: Tell me about it! Commander in Pips: So, I offer you today take a look at fractals in application to EW and take a look what does “fractal” mean to Wave theory. Pipruit: This will be great, because you’ve kept talking about “fractals, fractals” all the time. Although I foggily understand what it means, further clarification will be very welcome. Commander in Pips: That’s what today’s lesson is for. Commander in Pips: So, here we can see 5-wave impulse pattern and 3-wave countertrend correction that we’ve discussed on the second and third parts of current chapter: Each of impulse waves – 1, 3, 5 A and C we can depict or decompose into 5-wave patterns, but lesser value: Here each wave could be treated as overall cycle. Because, 1st wave looks absolutely the same as whole large 5-wave pattern, second wave – as large ABC corrective pattern and so on. Pay additional attention to A-wave and C-wave. While in large pattern they just 3-wave corrective move, in lesser patterns A-wave and C-wave are treated as separate downtrend, i.e. impulse waves. And B-wave is 3-wave retracement pattern. You will be able to see it, if, for instance, you will find 5-3-wave pattern on weekly chart and then drop your time frame to daily or even 4-hour. Here it will be easy to see. Moving in that direction will lead you to deep detailed picture as in part 1, here you can see one grade more decompose: Pipruit: Wait a minute, looks like I’ve got it now. It reminds me nesting cups. First we see big waves – 5-wave impulse move and 3-wave corrective move. Then each of them could be shown in 5-wave pattern, even corrective move. And then again, but during the last decompose – only impulse waves could be shown as 5-wave but corrective waves only as 3-wave. Commander in Pips: Yes, in fact this is absolutely the same 5-3 wave pattern that repeats again and again. Lesser moves could be collected into the larger moves. Pipruit: So, for instance, if you find out that market has accomplished initial 5-wave move up, then shown 3-wave corrective and accelerated above 5-th wave high, so what, we can say that all this 5-3 move was just 1st and second waves of larger pattern? Or, say third and 4th? Commander in Pips: Aha. Pipruit: Wow! And how we can trade it at all, how we will estimate what wave currently stands?