The indicator that shows the market’s reversal to traders in the form of up and down arrows on the charts is called the Reversal Fractals indicator.
When you look at the chart,s you will be overwhelmed by how the Market moves. It might look random. But if you look closely enough, you can spot the patterns in the market.
Fractals are one of those patterns. The Fractal is represented by the formation of a Higger High candle between two lower high candles.
Working of Reversal Fractals Indicator
There are essentially three candles in one fractal. And these three candles a big-bodied candles. The body-to-wick ratio of these candles does not matter. So inside the reversal fractals, there are two types.
- Bullish Reversal Fractal
- Bearish Reversal Fractal
Inside the bullish reversal fractal, the lowest low forms in between two higher low candles and in the working of the bearish reversal fractal, the highest high form sin between two lower high candles.
Settings of Reversal Fractals indicator
Inside the settings of this fractals indicator, you can modify the indicator to do calculations at the close of each bar.
Trading Strategy for Reversal Fractals Indicator
Buy Strategy
- To take a long position, you have to wait for the formation of a Bullish reversal Fractal that an upward blue arrow will represent.
- After that, you must wait for two candles to confirm the reversal.
- The place is a long trade.
- Put your stop loss at the nearest swing low.
- Your take profit level will be when you see a red arrow in a downward direction.
Sell Strategy
- To take a long position, you have to wait for the formation of a Bearish reversal Fractal that a downward red arrow will represent.
- After that, you must wait for two candles to confirm the reversal.
- The place is a short trade.
- Put your stop loss at the nearest swing high.
- Your take profit level will be when you see a blue arrow in an upward direction.
Conclusion:
Reversal Fractals Indicator is a convenient tool because you can use this indicator with another indicator to trade in the trend direction. Also, by using this indicator, you can ensure your buy or sell trades are placed at the right levels.
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