Dear Traders,
As some traders might know, the classical Fractal indicator offers insight into support and resistance levels and deeper price patterns. The normal Fractal, however, does not capture the price movements in the same way as the proprietary swat.FRACTAL does.
This article explains what the swat.FRACTAL is and how it can be used for analysing and trading the price charts. Learn how and why the swat.FRACTAL levels work the best in the Forex market.
The Fractal is an indicator that shows repetitive patterns by spotting critical candle highs or lows. How? A Fractal candle is the candle high or low, which is the highest or lowest within a group of (usually 5) candles.
A Fractal value of two (2) indicates that a fractal will be placed on a candle high and/or low if a candle has the following characteristics:
In our view the key Fractal level for the Forex market is 5 or 6 (max 7) and not 2.
Although the Fractal value 2 retains value for all financial markets and charts, for the Forex market specifically we prefer using the Fractal 5 or 6.
The Fractal value 2 does (probably) offer the most value for daily charts in the stock market and stock indices so it depends what markets you trade.
The swat.FRACTAL is specifically built for the MT4 platform, although traders can use the logic behind the swat.FRACTAL on all charts.
The swat.FRACTAL uses colors and symbols to quickly transmit information about the structure of the market.
The swat.FRACTAL changes color and symbols depending on its relationship versus the MAs.
Let’s first explain what information the shape of the Fractal indicator indicates.
Also the color of the Fractal indicator offers valuable information.
Diamond in uptrend: a green diamond above a candle indicates Fractals away from 21 ema zone (see image below):
Diamond in downtrend: a red diamond below a candle indicates Fractals away from 21 ema zone (see image below):
Circles in uptrend: an orange circle below the candle indicates a bigger bearish retracement because these are Fractals that appear in between the 21 ema zone and 144 ema close (see image below):
Circles in downtrend: a dark blue circle above the candle indicates a bigger bullish retracement because these are Fractals that appear in between the 21 ema zone and 144 ema close (see image below):
Circles around 144 ema: black and grey circles indicate Fractals around the 144 ema close:
The swat.FRACTALS help traders understand the structure of the chart quickly because the indicators convey multiple data points. All of this is explained in our course called SWAT – simple wave analysis and trading.
For more information, free analysis, webinars, videos, tools, systems, and methods for trading stocks, cryptos, Forex and options, please check out our website www.EliteCurrenSea.com.
Wish you good trading,
Chris Svorcik
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