FRACTALS

On your MT4 charts, under Insert>>Indicators>>Bill Williams>> you will see one called Fractals. When you put that on your 4 hour chart, little arrows appear like this:

These little arrows mark the places where price made a higher high with 2 lower highs to the right and 2 to the left OR made a lower low with 2 higher lows to the right and 2 more to the left:

Again there is a long hyper-mathematical explanation of fractals and why they work. We are only concerned with how they make us money. So all you need do is look at the most recent fractal. If it is pointing up, look back and see if within the last few bars there is another fractal that is pointing up, but lower than the more recent one. If so .. the bias for this pair is UP.

If the most recent fractal is pointing down, check the next most recent one pointing down .. is is higher than the most recent one? If so, the bias for this pair is DOWN.

In other words, has the most recent fractal on the chart 'taken out' the previous fractal pointing in the same direction? To determine this, you can go back several days .. but the further back you go, the weaker the signal.

Fractals are also useful in determining points of prior support and resistance which provides more Confluence.

So if on the 4 hour you have price above gann, qqe crossed up, and an up fractal arrow that is higher than the next most recent up fractal arrow ... you have a pretty strong indication that this pair is trending up and you will ONLY take long trades. Conversely for short trades.

Now .. you just have to figure out where is the best entry. To do that, we look for more CONFLUENCE.

NEXT: PIVOT POINTS