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John Ehlers created the Fractal Adaptive Moving Average forex Indicator MT4 (FRAMA), an adaptive moving average (MA). During typical market conditions, it stays flat while making large movements in response to price changes. It adapts its smoothing lookback period based on this fractal geometry by taking use of the fractal nature of FX markets. Use this forex indicator in conjunction with other technical trading tools at all times.
Fractals
Fractals are geometric or chart patterns that, when divided into components and subjected to a continuing feedback loop, exhibit the same properties as the more significant curve. Important market movements are decomposed into more dependable and profitable forex reversal signals with this assistance. Five candles or more are required to create a fractal chart pattern. It highlights the regions where market prices have found it difficult to rise or fall.
The following are the fundamental, easy guidelines for identifying fractals:
When an individual chart candle in any time frame is encircled by at least two left chart bars and has comparable lower highs to the right, a bearish turning point known as an up fractal appears.
When candles have two higher highs in either or both of the candles, a down fractal suggests a bullish reversal.
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Calculations of Fractal Adaptive Moving Average Indicator?
The exponential moving mean algorithm is used to create the Fractal Adaptive Moving Average (MA). The fractal dimensions of the price range under consideration are used to calculate the smoothing factor.
Trading with the MT4 Forex Fractal Adaptive Moving Average Indicator
To compute traditional moving averages (MA) in the Fractal Adaptive Moving Average Indicator for MT4, we can employ a variety of market analysis techniques.
- Price movement above or below FRAMA denotes a direction shift. Forex traders should be aware that the easy cross-over forex strategy, like every other move average method, is likely to produce false signals.
- To create a solid forex trading strategy, forex traders might combine a long-term FRAMA and a short-term FRAMA. The broad market trend will be defined by long-term moving averages. The Fractal Adaptive, a condensed version of the forex indicator, can then be used by traders to place trades inside the trend.
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 | No Minimum Deposit ECN Acount No Commission | |
 | Min Deposit of 20$ |
Conclusions
The Fractal Adaptive Moving Average forex indicator for MT4 carefully tracks price changes when they are relatively minor. However, FRAMA tracks the market from a different angle when price swings become more pronounced. The trend-following forex indicator can efficiently identify the pivot points of the currency market and eliminate all the commotion associated with price changes. When markets are trending downhill, FRAMA has a big benefit over traditional moving averages (MA) in that it can move very slowly. However, it quickly changes course when prices start to trend.
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