Fractal trading strategy is important in technical analysis within the forex trading industry. Bill Williams explained in full the concept of fractals, which are patterns that can signal potential changes in price movements. These fractals are created by a sequence of at least five consecutive bars, where the highest high is surrounded by two lower highs and the lowest low is surrounded by two higher lows. Traders frequently utilize fractals to pinpoint significant support and resistance levels, as well as to identify potential shifts in trends.
fractal trading strategy used on a chart
- Decide how you’d like to trade forex.
- Learn how the forex market works.
- Open an account.
- Build a trading plan.
- Choose your forex trading platform.
- Open monitor and close your first position.
trading indicater that helps your forex trading
Fractal trading strategy attempts to predict reversals in current trends When viewed on a chart,.the most basic fractal pattern contains five bars or candlesticks with these characteristics:
1. When the lowest bar is positioned at the middle of a pattern and two bars that have successively higher lows are located on each side of it, this signals the change from a downward trend to an upward trend;
2. When the highest bar is positioned at the middle of a pattern and two bars that have successively lower highs are located on each side of it, this signals the change from an upward trend to a downward trend;
rules when using the fractal trading strategy
Fractall trading helps traders see if the trend has actually reversed.and used in conjunction with other indicators, proves a powerful tool that can help traders succeed in trading
fragatel reversal patern
- he third candle in a series of five would be marked as having the lowest low
- The first two candles in the pattern would have higher lows than the middle candle
- The last two candles in the pattern would have higher lows than the middle candle
For a bearish fractal reversal pattern:
- The third candle in a series of five would be marked as having the highest high
- The first two candles in the pattern would have lower highs than the middle candle
- The last two candles in the pattern would have lower highs than the middle candle
The following graph illustrates a bullish fractal pattern.