Again, fractals ...


To manage your current position, you need to track the relative positions of two adjacent fractals. Referring again to the chart. For the trader to go long, the area 8-9 - rollback. He is waiting for the formation of the alleged end of the true bull fractal. Indeed, point 9 above the 7, trader expectations were confirmed positive lever, and worth saving position. Trader, a short position will result in a point 10. Up to this point it can not unambiguously determine the state of the market. What kind of information at the point 10 receives configured as bullish trader? For him, there is no information. He suggests that the area 9-10 - is the impulse of a new bullish fractal. A trader with a short position this plot takes a rollback, the lever is positive, and it retains the position. For a trader with a long open position the new information is made available, if prices fall below the point 9. Obviously, in this case, point 11 will generate a false bullish fractal. Trader should consider closing a position. Plot 10.11 after the breakdown of the level 9 should be taken as the true momentum and keep the bearish fractal short.

Manage the two fractals

Algorithm for the analysis of graphs using fractals is described in more detail than the. We turn now to the nuances of its practical application. First of all, fractals vary in size. Size can be determined by the absolute value of the momentum, and we can evaluate its usefulness in length lever. Indeed, prices may go far enough, and the recoil is almost back to the same level. Therefore, to measure fractals and thus to be able to take them to compare two values: the values of the momentum and leverage.

For a trader, the best is fractal with large momentum and leverage. Usually what happens. If prices are able to move with the trend far enough, roll back, usually minor. New traders are often all different. Having failed to properly assess the state of the market, they do release price, hoping for a large sliding motion. The reason is the adoption of technical analysis that, breaking through the level, prices returned to him. Not a fact, at least not in this fractal. We draw attention to the area 5.6 chart. Assume that the section 4.5 trader short. Prices went up higher than 4, but kept the trader's position in the hope of testing this top level. But a miracle happened: roll back the prices were fixed up. Later, after four months, prices will return to their previous level short sale, but the loss of time and opportunity to request a deposit confirm the need for timely closure of loss-making positions. Practical analysis of the market should be reduced to the analysis of two adjacent fractals: the previous, fully formed, and the current, emerging. The rest of the price history is not significant.

Whenever the market movement is formed in different ways, because different sequence of fractals. Very often, using the postulate of the classical analysis of the frequency of price, the trader analyzes the previous turn of the market, and hopes that this time prices will behave this way, the mirror repeating pulses and setbacks - even in the same manner as before. In fact, it suffices to estimate the state of the market according to the formed fractal, make sure that the positions are open in the right direction, and in the hope that the trend to closely monitor the formation of the current fractal. False fractal - a signal to close the position, the market had changed his mood. To evaluate the long-term trend, it is necessary to use two time series, such as daily and weekly candles. To determine the long-term trend should be allocated fractals and analyze two adjacent on the weekly chart. Fractals, as individual candles can be shaded. Thus, if a fractal is entirely within the momentum of previous fractal, it should be considered a shaded. In the analysis of such a figure can be interpreted as a consolidation. Perhaps the market is paused, but the general attitude has not changed.