Fractal Levels Indicator
The super tool to find important levels of support and resistance. Fractal Levels Indicator doesn’t repaint, use it to trade in Forex and other markets. Suitable for investors and intraday traders.
Description
Fractals are local extremums or turning points on the price chart. The picture below shows:
- bearish fractal (marked with red arrows);
- bullish fractal (marked with green arrows).
A bullish fractal is formed on the bar that has the highest high compared to the two bars to the left and two bars to the right.
A bearish fractal is formed on the bar that has the lowest low in comparison with the two bars to the left and to two bars to the right.
Fractals were invented and popularized by the famous trader Bill Williams.
How to use fractals in MT4?
By default, the fractal indicator is integrated into all versions of Metatrader terminals.
To add a fractal indicator to the price chart in the MT4 terminal, click Main Menu > Insert > Indicators > Bill Williams > Fractals.
You will see gray icons that show bullish and bearish fractals below/above price bars.
The advantage of fractals is that they show effective support and resistance levels.
The disadvantage of fractals is that they appear with a delay of 2 bars. For example, if you want a fractal to appear on the daily chart on Tuesday’s bar, you have to wait until Thursday’s closing.
Which is the best indicator for fractals in MT4?
The standard fractal indicator has one inconvenience – it doesn’t display support and resistance levels indicated by fractals. The Fractal Levels Indicator fixes this inconvenience, making it one of the best tools for trading with fractals in the MT4 platform.
When you add the Fractal Levels Indicator to your price chart, you will see two lines:
- The blue line connects bearish fractals, this is the resistance level.
- The red line connects bullish fractals, this is support level.
How to trade with Fractal Levels Indicator
It is considered that fractals are not a self-sufficient tool. Fractals do not give simple buy and sell signals with arrows, line crossovers or in other ways.
There are many ways to use fractals to produce buy and sell signals. For example:
- Combining fractals with moving averages.
- Combining fractals with oscillators.
- Using different timeframes.
In doing so, traders can give preference to both reversal and breakout signals.
We will tell you about one of the most effective – the fractal breakout test.
Fractal Levels Buy Signal
To enter a long position, you need:
- Find a resistance line that connects several fractals at nearby levels.
- Wait for the breakout – when the bar closes above resistance.
- Place Buy-Limit order where the resistance line was.
- Set Stop-Loss below the low of the bar where the breakout occurred.
The price chart below shows the example of setup.
The signal to open a long position appeared when the price decreased to the blue line after the bullish breakout. Closing a position can be performed:
- At the level of the next resistance.
- Mathematically, calculating the size of the reward so that it exceeds the size of the risk at least 1.5 times.
- With the help of trailing tactics.
Fractal Levels Sell Signal
The picture below shows three consecutive sell setups. All of them brought the opened position into profit territory, since the market was in a downtrend, and fractal breakdowns indicated its direction.
To close trades, use the methods mentioned above. Or develop your own way that best fits your risk profile.
Conclusion
The Fractal Levels Indicator for Metatrader 4 helps you trade around important levels. It doesn’t repaint, but note that fractals appear with a delay.
The Fractal Levels indicator uses bearish and bullish fractals to build:
- The supply line (resistance).
- The demand line (support).
Fractal Levels Indicator for Metatrader 4 allows you to:
- trade near really important levels;
- combine support and resistance levels and signals from other indicators;
- to trade along the trend and against the trend;
- invest for the long term or trade intraday.
To learn more about fractals, we recommend that you read the books of Bill Williams.
Be aware, the Fractal Levels Indicator for Metatrader does not guarantee the best buy and sell signals ever. Price may break through strong levels, turn around from them, or act differently than you expect.
Therefore, take care that trading with Fractal Levels Indicator will not destroy your deposit. To do so, first train trading on a demo account with a preferable broker.
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