The longer the period of formation of fractal structure, the more reliable the trading signal given by it.The less timeframe, the more ‘false’ fractals and breakdowns will appear. Sometimes the expectation of the moment when the ‘correct’ fractal is created, leads to the omission of the good point of entry.
In case of the emergence of several multidirectional fractals at some level with the subsequent breakdown of the level it is possible to expect a strong and long trend in the direction of breakdown.
The fractal represents the beginning (or the end) of some pulse movement and, therefore, it can quite be considered as a wave structure. It is possible to apply fractals in the wave analysis only on the periods from the D and above. In case of the determination of ‘validity’ of breakthrough of a fractal it is important to carry out correctly the analysis of the candle structure on which this fractal was formed. The crypto CFD trader is essential now.
- If closing of a breakthrough candle happens far beyond the accumulation level, then it is possible to open in the direction of breakthrough on a smaller timeframe.
- If the candle design represents the pivoting model, then with a high probability it is possible to expect the emergence of the return fractal and transition in flat.
The true breakdown of a fractal on any timeframe shall be confirmed by certain volumes. A firm breakthrough candle but with the small volume appears to be an unstable signal. Also for an assessment of volumes it is recommended to use standard designs of Price Action.
Nowadays nobody looks for the trading fractals on a price chart manually. For these purposes a standard package of any trade platform includes the Fractals indicator. We will offer two popular trading strategies on its basis.
Strategy Alligator + Fractal
Regular Fractals and Alligator indicators with standard settings are necessary for using this strategy. We trade all major currency and future assets: for the analysis and an entrance – M15, for maintenance – from H1 above (for futures – from D1 above).