How - To Make The Best Use Of The Fractal Technical Indicator

In order to use something the right way you have to know exactly what that thing does, right? You’ll be surprised at the multitude of forex traders who go off using automated forex trading systems and some trading strategy without knowing a thing about why it trades the way it does or the type of market environment it was designed to exploit.

The fractal indicator helps to automate the process of identifying swing/touch points you could use to draw trendlines and also measure market sentiment through order flow as price action not only paints the picture but also tells the whole story on any given currency chart.

I don’t think I have to reemphasize the importance of trendlines as tools of dynamic support and resistance. Lots of forex traders use them as can be seen by the massive follow through often following the breach of major supply/demand trendlines, even the traders who do not use them with their forex trading systems pay close attention to them when prices hover around major levels of forecasted resistance or support.

The downside to using trendlines to their max as a technical analysis tool springs from their being a tad subjective in nature. Different traders see different things on their forex trading charts all requiring their discretionary commitment to take action by betting on some bias and taking on a trading position making your job as a trader a whole lot harder than it needs to be.

Objective trading tools on the other hand makes for a much higher degree of succeeding at trading. If I were to teach you how to tell the market cycle in real time and also give you a trading strategy to take advantage of the Mark up Market Cycle, the only way to make sure you are going to see exactly what I see when doing your market analysis is teaching you how to trade with objective trading tools.

Most traders aren’t even aware of the power and ease the use of objective trading tool offer. Trendlines are only going to be objective if they are drawn using fractals as the flood of orders rushing into the market reveals through price action on currency charts at any given space of time.

An agreed standard of drawing trendlines starts with spotting isolated price points also known as fractals, swing points or touch points from which you pick the two most recent swing points you see on the chart as indicated by the fractal indicator as the dots, so to say, which you’ll use your supply/demand trendlines to connect.

The Fractal technical indicator helps you identify levels of price isolation as I love to call them on any given chart with a somewhat V – shaped visual as the candles form following the dictation of the external market psychology as observed with respect to order flow, this’ll save you the stress of having to put on eyeglasses closely looking at the charts to spot price point where you can draw trendlines from given the price data within your chosen market memory, and thus adding some degree of objective analysis to trading with trendlines.

You can go right ahead and start practicing the fractal/trendline forex trading strategy on a demo account and watch how the strategy works on a much closer level, when you’re comfortable with your results and trading performance you can then transition to a micro trading account through a mini and finally a standard account. Notice I didn’t say trade demo for X number of Months or Weeks?

Well, it’s because demo trading isn’t time dependent but rather confidence dependent, you’re not trading demo because you trying to prove that this strategy doesn’t work are you? Of course not! But you’re just really testing out the strategy on the other hand to prove to yourself that it works from first user experience, so you’re not just getting to learn how to incorporate the strategy into your forex trading system, you’re also learning to trust that it works so you can use it with the strictest discipline.

Don’t go making the mistake of dumping your poor performing trading system just because you read this article, telling your trading circle how you’re now a fractal/trendline trader and why it just rocks better than all your previous trading strategies, you’ll only look like a strategy/system junkie and we really do not want that.

Believe me when I tell you everything you’ve learnt about trading up to this point is going to help shape your future as a trader don’t go throwing out the forex trading basics you learnt earlier on just because you think they’re just, you know, the beginner stuff anyways.

Strive to become a chartist and a master at trade execution all the story, news events and so on are all discounted on the forex trading charts why bother looking elsewhere having other traders distorting your view of the markets, everyone’s entitled to their opinion but they’re not trading your money are they?

Hope you test out how to use the fractal indicator and see how effective it is even with the beauty of its simplicity, you can get a bit creative after using the indicator becomes second nature but don’t forget price is our number one indicator, price is the leader, follow it religiously!

Hope you enjoyed reading this article, don’t forget to drop your questions and comments, I always love hearing them. Share and educate your friends if you found this helpful they just might thank you for it. Cheers

Article Source: http://www.streetarticles.com/day-trading/how-to-make-the-best-use-of-the-fractal-technical-indicator