Fractals for Forex Trading
If you could understand fractals of the market, your understanding about the market will be much deeper.
And it will help you predict the next price momentum more precisely.
In my view, this is one of the essential skill to generate money by trading,
The concept of fractals is…
“similar partial shapes consist of the overall shape “.
Just like this↓↓↓
As you can see, a large triangle shape is made up of many varieties of smaller triangles.
If you take a look at financial market carefully, you will notice that the market also has fractals just like the above picture.
How to apply fractals into Forex Market
You can use this when you do *Multi Time Frame Analysis.
* Multi Time Frame Analysis→the analyzing method using different time frame charts.
Let me explain further by using some charts.
Above chart is 1 day chart.
Now let’s take a look at what is happening at a red mark in the lower time frames.
I hr chart is like this ↑
And 5 min chart is like this ↓
When I compare 1 hr chart and 5 min chart,
we can know that these two chart’s waveforms are totally different right?
So, It means there are as many different waveforms as there are different time frames even these charts were made at the totally same time.
If you are able to know this fact, it will make you possible to gather more trading tips and reasons to go in your trade in the lower time frames.
Double Top in the Double Top
In this chart, the market is forming a Double Top at high price zone.
Now, let’s take a look at what is going on at the lower time frame chart↓
In 15 min chart, the price is also forming a double top and triple top.
See? this is a good example of how fractals are working at forex chart.
Actually, this chart form is made very quite often at many time frames.
And also you can use this as a strong entry signal to trade sometimes.
What’s more, If you want to make use of fractals in your trade, you need to have an ability to be able to do multi-time frame analysis.
It is simple to say. but actually, this is the most difficult thing for trading I believe…
Anyway, I will talk about the multi-time frame analysis at another time.
Please look forward to it!!