Again, fractals ...


You can build a pyramid

An important practical question: the opening position. A position as possible in the area of momentum, and rollback. If a trader sees the active fractal impulse to open a position is just a short stop level. Rollback is sure to be, and it is important to maintain the current profit. If the "load" on the rollback occurs, the best results are obtained by a "pyramid in a losing side." Yes, the old rule is that you can not do this in any case. It is actually possible, but within the fractal.

If fractal was false, and it was not rolled back, and the momentum, open positions better immediately eliminated. Moreover, it is better to build a pyramid, constantly increasing the size of the order. For example, on a pullback upward movement should be a rough estimate of the range of rollback and divide this range into several levels. The lower the price, the more shares you should buy. The results will be brilliant: the average price of your purchases will be lower than the average price of that range.

Fractals can be used for capital management. Area of uncertainty arises within the fractal. In principle, a risk assessment should be used as the value of the momentum, and the importance of leverage. Classical rules of Stop-levels by the percentage change in the price at the moving average, and in many other ways is not very suitable for fractal analysis. In determining such levels should wait to give the emerging fractal signal: it true or false. So stop levels must be located outside of the fractal. Failure to do so will lead to false alarms stops. Position size should be chosen with regard to the rule.

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So, what benefit can be derived from the primitive-looking fractals? Price chart gets a strict structure, consisting of four formations. If you avoid short positions, but always buy, you can reduce the number of fractals to two: the upside both true and false. Price chart analysis can be carried out without additional indicators - only two related fractals. This is especially true for those who do not have access to a powerful suite of technical analysis. No need to know a lot of historical data. It is important that they have enough to build two fractals.

Select fractals on the chart can not only by Zig Zag. This is the most primitive way. You can use the indicators or just use the representation of prices in the form of charts Kagi and Renko. Approach is highly individual. No need to predict the price movement is a thankless job. There is an opportunity to focus exclusively on money management. Open positions in any direction, and to understand the mood of the market, we wait until the end of the formation of a fractal. If the trader is right, just saves the position and watch the next generation of fractal. False if the fractal - the position should be closed. Risk is measured by the size of the fractal. The material is mainly for beginners. Fractals - not trading signals, but rather, like the waves of Elliott, a certain look in the random movement of prices.