What are fractals?
Fractal signals are indicator points on a trading chart. They tell the investor to which way the market price points are going. Fractal patterns usually consist of about 5 bars, sometimes more.
The rules to follow when using these indicators
When there is a high point in between 2 lower high bars, there is going to be a turning point. It’s usually a bearish sign of sorts.
If there is a very low bar in between 2 higher lows, than there is going to be another turning point. It’s usually a bull-type point.
These are your two main signs to look out for, especially when deciding which direction to take.
What to consider when using fractals?
These are merely lagging indicators. It’s best to use these to confirm whether or not something went in reverse.
When it comes to long time periods (more bars on the line), there are two things a person has to remember. It means that a reversal is very possible. It also means that lower generated numbers are also going to be possible.
Never use a fractal system alone. They are meant to be used in conjunction with other tools, tools such as the “alligator”. These tools work in connection with one another. If a person uses these alone, the best results will always be blinded.
When it comes to short-term and long-term planning, going long-term is always better. This can be said about anything really.
Why is this trading effective?
In a nut-shell, fractals are most effective in determining which trading options for Forex or cryptocurrency trading are going to be best for a person. If something is going to go south, the points will make the trader aware. It’s also helpful in pinpointing which directions are going to be most profitable in a financial way.