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Indirection is only a problem when reader can't tell which layer of the story they are on Using a narrator that is retelling events from their life is a common literary technique. Many books do it...
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Source: https://writers.stackexchange.com/a/45070 License name: CC BY-SA 3.0 License URL: https://creativecommons.org/licenses/by-sa/3.0/
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# Indirection is only a problem when reader can't tell which layer of the story they are on Using a narrator that is retelling events from their life is a common literary technique. Many books do it well. In these books is it not uncommon for the narrator to then retell a story that was told to them. This is exactly what you have here. The trick to making it not confusing it to make the transitions clear. You can use tense or formatting to separate the sections. For example: POV (Present tense) -\> Narration (Past tense) -\> Story (Past tense in Italics). If you are going to use formatting to separate it, use standard formatting for the part that will make up the majority of your word-count. You don't want to make your readers read more italics than necessary. Alternatively if you are capable of writing in distinctly different narrative voices you could use that to separate it. The narrator for each of your sections is a different character, if the style is different enough the reader will be able to discern which indirection they are in. A book that did this well is _Name of the Wind_ by Patrick Rothfuss. The majority of the story is told through a recount of event by the main character. When the action cuts to the present day there is a clear distinction in the formatting of the novel. The character often retells stories within his recounting of events, these are sometimes in italics and sometimes in quotes. Depending on the exact context. Overall the number of indirections that is acceptable is only limited by your ability to keep the layers distinct and understandable.