How to use fractals in forex trading

Fractals - an indicator introduced by Bill Williams. Simple and versatile, fractals can be used as a stand-alone indicator or in combination with other Forex indicators. Bill Williams also gives us his approach to using fractals in trading, which we are going to highlight here as well.

Fractals point tops and bottoms where market reverses. In order for a fractal to form, there should be a series of 5 consecutive bars where the middle bar will be the highest preceded and followed by two lower neighboring bars on each side: Since fractals highlight points at which price failed to hold and therefore reversed, it is logical that once price beats its old fractal, there is a new strength coming. Setting a trade at the breakout point is an obvious and simplest application of the Fractals indicator.

Another way to describe it: Fractals indicator makes it easy to identify and connect the most significant tops and bottoms needed to draw a trend line. Drawing trend lines using fractals could give some advantage to Forex traders since other market participants might also be using the same obvious price points for drawing trend lines.

In an uptrend we will witness that there are more up fractals broken than down fractals.

In a downtrend there will be more down fractals broken. As trend up or down progresses a successive break and advance of new fractals will be seen. Should the break of the previous fractal fail, we get a how to use fractals in forex trading sign of price consolidation.

Failure to successfully advance past previous fractal puts price on a consolidation path. To avoid reliable indicators for binary options immediate coiling price will attempt to break at the opposite fractal.

Should how to sell royal mail shares equiniti move also fail to bring results, traders should prepare for a ranging market period till a new successful breakout. According to his system, Fractals have to be filtered with the help of Alligator indicator.

Main rule above all rules when following Bill Williams' method: Such signaling fractals remain valid till a pending entry order is triggered or a new valid fractal is formed a position will then be re-set according with the new fractal.

Consecutive fractals going in the same direction that are formed after the first order if triggered can be used to add on to an open trade.

Forex Fractals strategy - How to use fractals in Forex Trading

This trading system is very powerful. Even a little bit late but surely profit.

Learn how to use the Fractal indicator in the Forex and Financial markets

A fractal appears only after 5 consecutive bars has made a required pattern: Fractals, in my opinion, shouldn't be traded alone. Above I've shown the method suggested by B.

Also traders use fractals in combination with many other indicators, where the goal is to get a confirmation of a trend direction and then based on that trade fractal breakouts with the trend. How to trade with Fractals Fractals as breakout points Since fractals highlight points at which price failed to hold and therefore reversed, it is logical that once price beats its old fractal, there is a new strength coming.

Fractals as trend line connecting points Fractals indicator makes it easy to identify and connect the most significant tops and bottoms needed to draw a trend line.

Simple Forex Fractals Trading Strategy

Fractals as trend confirmation In an uptrend we will witness that there are more up fractals broken than down fractals. Fractals for trend consolidation Failure to successfully advance past previous fractal puts price on a consolidation path. Fractals should be traded the following way: Forex Fractals formula Download Fractals code: Initial stops should be placed behind the closes fractal.

Here is how it works: