A fractal is a repeating pattern that occurs over and over again ad infinitum. In the FX markets, it occurs over all time frames. You can even find a price pattern on a daily chart that is the exact replica of a current 15 min chart. Trading them is not easy, don’t let anyone tell you it is. This is especially true if you go through a purple patch and have a long line of winners. It’s then that you start to think you are invincible and you have cracked it and then… right then…  is when you over-leverage and it all comes crashing down. Been there done that so many times and have now learned my lesson. Like always you learn from painful experiences. I have a purpose built indicator that overlays current price with historical price and that allows me to scroll back with one over the other to find a good match. At any one time, I could find 2 or 3 and then it’s a matter of watching and waiting for one to take the lead. Sometimes price will switch between one or another but if they all show price going up for instance then if you are long it’s just a matter of waiting. You can have some large drawdowns with this method which is why a smaller lot size to start is always best.

If this price and pattern repetition does truly happen, and current price follows previous historical price, then how can the markets be random? They can’t is my answer. Sometimes current price action can follow a fractal almost to the pip, so how can this be a random event if the historical price is from 2 or 5 years before. I truly believe the markets are rigged and I think the banks trade these fractals and their algorithms pick up on previous price action and formation and track them to the current price.

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