The use of indicators in the Forex market is a very popular way to filter false singals.Though new traders are always looking for the signals. Due to the use of a high-frequency trading approach, they forget to maintain the quality. Losing the quality in each trade is a major issue. If you fail to maintain the standard in your market analysis, you are not going to get any good results. Eventually, you can’t support your family since life is very expensive in Hong Kong. However, if you use a stick to the common rules at trading, this can be solved easily.
This article is not going to write about the life of a trader. We will make sure that you know the proper use of a fractal indicator in the daily time frame. Let’s learn some amazing tricks which we can use with the fractal indicators.
Overbought and oversold region
The fractals are mostly used to the overbought and oversold regions in the major pairs. The indicator paints a small arrow above or below the candlestick. If the arrow is formed above the candlestick, you should expect a bearish correction or bearish reversal. On the contrary, if the arrow is formed below the candlestick, you have to look for buying opportunity. But spotting the buying or selling zone is not enough. You have to use the knowledge of support and resistance level to execute the trades with a high level of precision.
Analyze the candlestick pattern
Analyzing the candlestick pattern may the most effective to assess the quality of the fractal singals.Though professional Forex traders always use the most reliable price action signals to find the potential trade setups. Some of you may think, analyzing the candlestick pattern is enough to secure the profit. But if this was true no would ever use the indicators. For example, let’s consider a bullish pin formed at the critical support level. So, it’s very obvious you go long on that certain pair. But if the next candle becomes a black marubuzu it indicators the bearish continuation pattern. All of a sudden the bullish signal is invalid and you have to look for the short trade setup. However, those who are using the fractals can get confirmation from the market. In such a case, you will not spot any bullish fractal below the candlestick. So, you can easily stay in the sideline.
Importance of daily time frame
Fractals are very unpredictable. And if you start using the fractals in the lower time frame, finding the forex signals will become impossible. Many people often say fractals are not good to find the best signals in the market. But if you analyze the losing trades, you will notice all the trades are executed in the lower time frame. You need to analyze the fractal signals in the higher time frame. The daily time frame is considered as the ideal time frame as the price actions signal highly accurate. Once you learn this trading technique, you may consider it as the best trade filter indicator.
Learn to trade in the demo environment
You must learn to use the fractals in the demo environment. The demo trading account gives you the perfect learning ground. Some of you may think the use of a daily time frame in the demo environment is boring. They can use the simulation software and learn the use of fractals. Fractal indicators are excellent trade filter tools and can give you highly accurate results in the daily time frame. But placing the trades at the right time is a little bit tricky. For this reason, the expert always suggests the new traders in Hong Kong use the demo account. Unless you feel confident in the demo environment you should not use the fractal in real account. Always think about the safety of your investment and you won’t regret the results of any trade.