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Trade
Fractals in Forex
So often used in trade fractals remarkably understood by many traders, but do not wish to be clearly articulated. This is the case when briefly and clearly describe the subject of the conversation is not easy. Dry sound creepy.
Forex fractal (Fractal) is a repeating geometric pattern, the form of which can be divided into parts and submit a reduced copy of the whole. Notice that the fractals were described in bill Williams called Trading chaos. That person can be considered the father of fractals in Forex.
Briefly explain "on fingers", the fractals on the chart, determine the extrema, namely, local maxima and minima. Accordingly, if we see an extreme point, then everything in between can be considered valleys. Fractals can be aimed up and down. They are formed from a number of consecutive bars.
For example, if multiple bars on the chart represent reduced one by one the candles (bars), the minimum price is the fractal. After him will be growing bars. Graphically the local minima and maxima can be seen in Fig.1.
Thus, the trader determines the local maxima and minima on the chart, not rarely used in trade as an important price levels. Of course, the importance of fractals. Not rarely on the same chart the fractals look different significance, which is determined either by the number of bars between peaks or the distance from the average value of a price, or even some sort of method. They may be combined, choose this way to get in the trade expected result in the analysis of the market situation.
The use of fractals in the market
The simplest example is two ZigZag indicator with different periods. In Fig.2 just possible to notice that the more sensitive parameters reflect the larger number of fractals in the market. It is possible conditionally to consider the corners of the red indicator the more significant levels than the angles of the blue.
If we talk about the fractals indicator bill Williams, he is in the MetaTrader4 platform called Fractals. In Fig.1 this indicator is depicted. Generally, after the work of Williams of different traders in their own way interpreted the notion and began to make changes and additions according to their perception of fractal theory. The same indicator ZigZag does not match the theory of fractals Williams and more flexibly configured by the trader.
Forex fractals are often used by traders who prefer to work in the market on price levels. It turns out that local highs and lows represent the price levels, though not always significant.
Fractals can be used:
• to determine important price levels
• identifying points to open the transaction,
• objective method of analysis of the market,
• to find patterns in the market.
For example, a very popular fractal trawl, which is used currency speculators. Its advantage lies in the fact that the order of closing of the transaction all the time is one of the most important price levels, which can significantly reduce the number of fixations positions due to the incorrect reversal of the trend.
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| Category: Forex | Added by: (06.11.2017)
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| Views: 337
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