The Simple Difference between Chaos and Fractals for Financial Markets

Did you know that there are critical differences between Chaos and Fractals, and that this difference is the key to properly characterizing financial markets? Even other YouTube videos made by people with expertise on this subject usually mix these things up in their descriptions, and don't explain the differences between fractals and chaos, and what they capture about financial markets. Inspired by the book Jurassic Park, in this video we will be digging further into chaos and fractal theory, and discussing what this means for financial markets. Chaos theory is a mathematical theory which explains how some kinds of systems behave in deterministic but effectively unpredictable ways. On the other hand, Fractals do not come about from deterministic dynamical equations, and are as related to complexity theory and emergent behavior as they are to chaos. Credits: Snowflake photo - Egor Kamelev, sourced from Pexels Coast photo - Oliver Sjöström, sourced from Pexels Seismographic chart - sourced from the USGS.