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Definition of 'Fractal'
A type of pattern used in technical analysis to predict a reversal in the current trend. A fractal pattern consists of five bars and is identified when the price meets the following characteristics:
1. A shift from a downtrend to an uptrend occurs when the lowest bar is located in the middle of the pattern and two bars with successively higher lows are positioned around it.
2. A shift from an uptrend to a downtrend occurs when the highest bar is located in the middle of the pattern and two bars with successively lower highs are positioned around it.
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Investopedia explains 'Fractal'
Fractal signals are most useful when used in conjunction with other technical indicators, such as Fibonacci retracement or various moving averages. It should be noted that this is not a widely used indicator, so it may not be available for every type of charting application. But various third parties have developed various plug-ins which make using fractals possible.
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Search results for 'Fractal'
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http://www.investopedia.com/articles/trading/06/Fractals.asp
... Note that many other less perfect patterns can occur, but the basic pattern
should remain intact for the fractal to be valid. Figure 1. ...
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http://www.investopedia.com/articles/technical/111401.asp
... waves. Because of the "fractal" nature of markets, however, Elliott was
able to break down and analyze them in much greater detail. ...
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http://www.investopedia.com/articles/forex/08/multiple-timeframe.asp
This is often the first - and most costly - level of analysis to be overlooked.
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http://www.investopedia.com/articles/forex/11/Harmonic-Patterns-In-The-Currency-Markets.asp
... being traded. The fractal nature of the markets allows the theory to be
applied from the smallest to largest time frames. To use ...
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http://www.investopedia.com/articles/trading/06/swingtrades.asp
... To read more on these subjects, see Volume Oscillator Confirms Price Movements,
Interpreting Volume for the Futures Market and Make The Fractal Your Friend. ...
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