Hi People,
Ive been trading for a just over a year, and now im looking at the Fractal Indications which can be used with many charting software packages.
When applying fractals to previous trading data, it seems easy enough to understand, and these can help alot with trendline drawings.
However, the question I ask is this:
When applying Fractals in LIVE charting data, such as the current market price on a Forex currency pair, do they change when new highs and lows are achieved, or is a new fractal just noted on this new market price. Is it correct to say that once a fractal has been indicated by either an up or down arrow that it will stay in that exact posistion for that candle.
In short, and in lamo terms, CAN fractal’s dissapear and recorrect them self, at a future price.
I could see this being a problem when using them as trend line points, realising that your trend line is not accurate when the fractal you origonal used dissapears and a new one forms which is way out from the origonal drawn tredn line. Obviously, using historical data does not present this problem, as they have had time to ‘re-correct’.
Many Thanks
James
Are you using any particular indicator to draw the fractal arrows? In MT4 there was one I looked at once before (don’t recall the name, it might have been Fractal) but it DID redraw itself. Once I figure it out, I ditched it because that is totally useless to me in realtime.
I noticed the redrawing with a tool I have used before called Forex Tester. It would draw a fractal arrow and then several bars later it could potentially move or disappear.
That was my main concern, and yes, I am talking about the Fractal indicator in MT4. IT seems very usful in historical data, but live data is a whole new story.
Im looking into combining it with another fixed indicator to see what results I can gather.
Ill give it ago alone on live data first, and see what problems, if any, I run into:eek:
The term most commonly used by traders to describe the disappearance of the arrows is repainting. Yes the MT4 repaints. Guess what - so does the current candle. Repainting on an active chart is only a problem if you allow it to be. Once you understand what is happening the problem goes away.
The way to handle this is the same way as handling the current candle and any indicators affecting it. You can wait until the candle closes when there is no chance of repainting or you can “jump the gun” if you believe that it won’t change very much which is usually the case. I have no problems using the Fractal indicator.
I see, that makes more sence.
I should have re-worded my origonal question. I am indeed using closed previous candles, my main concern was if Fractal’s can be repainted on say the next candle or third etc from where the origonal fractal was first displayed.
You need to learn how Fractals work. Look at other’s postings about it and study it on live charts. That is how I did it. It will probably take several days to learn.
By fractals I understand an observation of repeating wave pattern(s) which just don’t repeat but do so in a ratio/calculated kind of unfolding such that one can use the patterns to cluster together waves of the same trend direction (like is it a correction to a former strong move or part of a new/next fractal?), and previous & adjacent waves can be used to sort of call targets (I wont say predict, it’s a beautiful beast this markets) and fractal ends/starts. Using code to place points already observed like a map & able to target moves with magnitudes of time & pip-distance not subjective description. That would be hard to automate (the one or two such software - nonMT4 ofcourse - I bet were made by someone who ended up lacking time to trade I hear it works?).
I wouldn’t trade fractals off an indicator or super-app much less the mt4 one (I would have better results with CCI & Stochastics instead), but many ways to fish including draining the pond if it works well that way. I fractal with EWT and fibonacci, quite fractolized /callable & rhymes well with s+r like a good pip-engine ought to.
Hey James,
One of my very first ‘studies’ was Bill William’s ‘Chaos Theory’ and, so far as I can tell, Bill Williams was the person responsible for bringing Fractals and ‘Fractal Geometry’ to the market. I did this excerise yesterday for you i.e. just Google ‘Bill Williams Fractals’ and you won’t believe the amount of information available to you on the subject.
To answer your MAIN question: you HAVE to wait for the CLOSE of the current bar in order for the Fractal to be ‘valid’ because a Fractal can (and does) dissapear if the last bar of the Fractal formation ‘changes course’ during the formation of the Fractal signal. BUT: once a Fractal is drawn IT REMAINS A FRACTAL (unless your broker ‘manipulates’ historical data which IS possible let me tell you i.e. I’ve seen this before).
To summarise: there are two main ways of trading Fractals. One: you trade ‘within’ or ‘between’ the Fractals. Two: you treat the Fractals as ‘breakout’ points. And of course and as you quite rightly have mentioned: Fractals make it SO much easier to draw trendlines (especially if you’re somebody like me who cannot ‘see’ support and resistance as easily as others and IF you’re going to incorporate support and resistance into your trading methodology of course).
There’s a lot more to Fractal formations than the ‘traditional’ ‘five bar Fractal pattern’ but you’ll find all that information if you use Google as noted above. As a matter of fact: there is a LOT to Fractals e.g. a Fractal, when, drawn, does indeed represent an Elliot Wave of one degree or another. Also: what a lot of people don’t realise is that so many trading systems etc. rely on Fractals EXCEPT that they’re not CALLED Fractals. As an example: my ‘main’ trading system uses HSP’s (‘High Swing Points’) and LSP’s (‘Low Swing Points’) and guess what??? Those points are nothing other than ‘three bar Fractals’ (they’re just not CALLED Fractals). There are MANY example of this I assure you.
Anyway: have fun.
Regards,
Dale.
learning from the begining
Hi Dale
Firstly thank you for finding the time to give a summarising reply to my original question, at first I thought I had not fully explained what my dilemma was, however you seemed to answer it in one.
I will indeed research the area of Fractals in more detail as they seem to form the foundation of many popular trading approaches, and as you said, these approaches may not be recognised for their use of Fractals due to different names being used instead. E.g. Swing Trading
Hopefully many more doors will be opened when I understand the concepts involved. I highly doubt it will be a riveting read; however that’s a price worth paying if it’s a useful tool to add to the trading tool box.
Thanks again,
James
My pleasure,
As I said: Bill Williams (so far as I can tell) is sort of ‘the father of Fractals’ insofar as they pertain to the market. Try to find a .PDF version of ‘Trading Chaos - Second Edition’ (trust me: it’s there i.e. just about evey book I’ve ever bought is now freely downloadable from the Internet). In that book there is a chapter (or two or three) detailing ‘Fractal Geometry’ and it’s use in the markets (as Bill Williams sees it anyway). As a matter of fact: if you’re not interested in the entire book I saw yesterday that you can ‘review’ the relevant pages using that ‘Google Book Reviewer’ (or whatever it’s called) for a cetain number of times.
And don’t worry: as I said Bill Williams was one of my first ‘studies’ and I remember using a Fractal Indicator and having a Fractal painted on my chart and then it would dissapear when I looked the next day (or hour) and I thought I was going MAD at the time!!! LOL!!! At least I know NOW that I wasn’t!!! LOL!!!
It’s odd though you know: there are SOOO may books and systems on the market and you’d be surprised at just how similar they all are!!! It would seem that there really is only a ‘finite’ number of ways of trading the markets and yet there’s an ‘infinite’ number of books and systems!!!
Regards,
Dale.
I looked at a system which uses “5 bar patterns” which were really fractals. It used them for breakouts which was horrible on anything other than daily and weekly because the order was a few ticks above the highest fractal so you were buying high and expecting price to go higher. After a while this was stupid to me:D so I only trade it on the daily and it works great 
Anyways I use fractals to trail my stops on both of my systems (hidden div with the trend and reg div against the trend) I also trade chart patterns.
Well said ‘jaksasquatch’,
My ‘main’ trading system (Wilder’s Swing Index System) also uses similar ‘logic’: similar in that it uses what I call a ‘three bar fractal’ which is validated by Wilder’s ASI and that instead of stops being trailed at these points you stop and reverse at these points (there’s a little more to it than that but that’s the ‘basics’). It’s also useless on anything shorter than the daily timeframes (and my personal opinion is that MOST things are useless on ANY timeframe shorter than the daily timeframe anyway)!!! LOL!!!
But as I said previously: I really do believe that insofar as technical trading systems are concerned there really is a finite number of ways to trade e.g. Larry Williams, Bill Williams, and Wilder (those are the one’s that come to mind right now but I know there’s a few more) all have at least one technical trading system that uses these (or very similar) patterns. The patterns are ‘as near as damnit’ the same patterns: they’ve just been given different ‘names’ by their authors is all!!! What varies though is trade / risk / money management of course and that’s where each technical trading system begins to differ.
I’m pleased to hear that your trading is going well.
Regards,
Dale.
I use thinktrader app for Android i can not trade on my PC, only on my phone, and in the 8 hour frame it does desapear it can happen afther 3, 4, 5, 10 even 20 candles are closed, i notace that in the 1 minut frame once it’s drow it dosen’t desapear no mather what makerct does, but i can not trade on the One minute because it’s to volátil, and i’ll BE overtrading whit comition eating all my profits.