HOW TO TRADE FOREX WITH FRACTALS

Fractal is a simple but effective technical analysis tool for forex trading. Fractals look like arrows, and are classified into two types up fractals and down fractals. Up fractals represent the support levels and the down fractals represent the resistance levels. 

The trading technique with fractals is easy. Different trader use fractals in different ways. Generally, when the immediate down fractal is broken, it is a bearish signal, in other way, when the up fractal is broken, it is the bullish signal. So the traders generally should enter and exit from the market when the fractals are broken. Look at the following image, where you can see the breakout of fractals.

Source:metatrader4.com

I will suggest a different technique of trading forex with fractals. I consider fractals as an indicator that explains the ultimate movement of the chart. When a down fractal appears and followed by two candlesticks, the fractal represents support level and indicates that the trend will remain bullish until another up fractals appears. Similarly,  When a up fractal appears and followed by two candlesticks, the fractal represents resistance level and indicates that the trend will remain bearish until another down fractal appears.

A fractal is confirmed when it is followed by two candlesticks. Breakout of the fractals can be effective to enter into the market and exit from it. I think fractals is not alone sufficient to provide accurate entry and exit signals rather the signals should be confirmed by the other indicators. The breakout of a fractal means the price movement beyond the fractal.

Up fractals can be used to go long, if the entry is confirmed by any other effective indicator. Similarly, down fractals can be used to go short, if the entry is confirmed by any other effective indicator.

Fractals can be placed on the chart of any time frame.

Dear traders, hope this post will add another indicator into your trading platform. You can ask any question below.