Fractal Indicator

Fractal Indicator

Learn the best ways of applying fractal signals for profitable forex trading. Detects potential price swing signals and is ideal for scalping and day trading

The Fractal indicator is a swing trading tool specially developed for determining the repeating price-action patterns on MT4 charts.

In financial trading, the market sentiment rapidly changes depending on the random rise and fall of the asset’s supply and demands. So the price can’t make a straight move even during a solid on-trend market situation.

The biggest challenge for technical traders is to spot the genuine price-reversal areas. The ability to spot the critical price swing area enables you to determine moneymaking trading opportunities at any trend condition.

For instance, the price moves downwards for a while after making a strong bullish move. You are confident the market is going to resume its bullish surge again. So, it would be best if you could find a bullish price reversal pattern that will confirm the end of current correction period before confirming a buy order.

Fractals define the easiest and the simplest way of determining the price reversal areas. It simply places a dot above or below a candlestick to indicate an upcoming price reversal. For this reason, fractals have gained a wide range of acceptance from beginner-level swing traders, besides expert professionals.

How to use Fractals for determining profitable buy/sell signals in forex
The fractal signal appears as tiny small dots at the candlestick highs and lows. The blue dots below the candlestick’s low indicates bullish price reversals. On the other hand, the red dot at the top of the candlestick signals a bearish reversal.

This indicator closely tracks the random price movements. It delivers a reversal signal every time the price shows a possibility to change its direction. That is why it produces frequent signals in shorter timeframes. It is one key reason behind its wide popularity among scalpers and day traders. However, the signal frequency gets lower when you apply it on longer timeframe charts.

Since it offers frequent signals, going after every fractal dot might not be a great idea. We recommend adding other technical factors like support/resistance or moving averages to filter the valid fractal signals.

In the above image, we’ve combined fractal dots with horizontal S/R levels for anticipating the buy/sell setups. As you can see, the signals that appeared near the support and resistance zones are more valid than the signals generated in the middle of a choppy market.

Conclusion
The fractal indicator offers one of the simplest ways of determining price reversals. When you apply it, your goal turns out to spot the best reversal signals at the correct market levels. So, combining it with other price-action tools such as support/resistance, trendlines, and moving averages may bring better trading results. According to our review, this super swing trading indicator is a better match for forex scalping and day trading activities.