How Does the Fractal Markets Hypothesis Work?

Fractal Markets Hypothesis (FMH) uses traditional quantitative methods and other theories to explain the behaviors on investors and market participants when there are chaos and anomalies in the market. As a new capital-market theory, FMH also gives a vivid explanation of market behaviors prevalent in periods of booms and crises. The Fractal market hypothesis uses fractals and other chaos theories to explain the behaviors of the stock market given the daily randomness and turbulence. Due to the movement of stock prices in fractals (fragments), and the repeatable attributes of fractals, FMH analyzes and gives explanation to stock market trends.