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Today In this article, I am going to discuss one of the most unique trading indicators i.e. Fractal chaos bands. This indicator is a technical analysis tool that combines Fractal geometry and Chaos theory to help you identify possible trading opportunities.
What is the Fractal Chaos Bands Indicator?
Fractal Chaos Bands (FCB) is a very powerful technical analysis tool used by traders to identify the upcoming trends and reversals. The indicator is made from the composition of two bands i.e. Upper Band and Lower Band. The security price oscillates around these two bands. When the price oscillates around the upper band it signals a bullish market and vice versa when the price oscillates around line lower band it signals a bearish market.
Key Points about Fractal Chaos Bands Indicator on Pocket Option
- Fractal chaos bands are the technical analysis tool that helps us to identify the upcoming trends and reversals using Fractal geometry and Chaos theory.
- When you unbox the indicator you will see the upper band and lower band which act as the support and resistance for the price and using these two bands you can easily identify the upcoming trend and reversals.
- The default period for the indicator is 2 you can even reduce the period. If you are going to trade with a short-period chart.
- You can find the volatility of a security using the two bands. When you notice a big distance between two bands it indicates high volatility and vice versa small distance between two bands indicates low volatility.
- You can easily spot the best entry and exit points using the bands with the green candle close near the lower band signals a good buy point and conversely, when the red candle opens near the upper band signals a good sell point.
How to Insert the Fractal Chaos Bands on Pocket Option?
- Step 1: Log in to your Pocket Option account. As I said above you can even try this indicator on the Pocket Option demo account.
- Step 2: Click on the indicator button and search for Fractal chaos bands in the indicator list.
- Step 3: Next click the name. and change the settings of the indicator as per requirements.
Signals to open trades with Fractal Chaos bands
When the green candle closes near the lower band it signals a good upcoming bullish trend and here you can consider placing a buy trade.
Similarly, When the red candle opens near the upper band it signals a good upcoming bearish trend and here you can consider placing a sell trade.
Confirm the Trend with Support and Resistance
If you have read my previous articles, I have always suggested using a trend confirmator for better results and signals. With Fractal chaos bands, you can always use trend confirmators like Support and Resistance and other popular trend indicators like Super Trend & more.
You will get an even more strong buy trade signal when a green candle closes near the lower band plus it is near the support level Conversely, You will get an even more strong sell trade signal when the candle closes near the upper band plus it is near the resistance level.