Fractals are geometric patterns that repeat themselves at different scales. In forex trading, fractals are used to identify potential areas of support and resistance. These areas can be used as entry and exit points for trades. Calculating fractals can be done in excel using a few simple formulas. This article will explain how to calculate fractals forex in excel.
Step 1: Obtain Price Data
The first step in calculating fractals in excel is to obtain price data. This can be done by accessing a forex chart on a trading platform or by downloading historical data from a forex data provider. The data should include the high, low, and close prices for a given period, such as a week or a month.
Step 2: Calculate the Highest High and Lowest Low
The next step is to calculate the highest high and lowest low for the period. This can be done using the MAX and MIN functions in excel. The MAX function will return the highest value in a range of cells, while the MIN function will return the lowest value.
To calculate the highest high, enter the following formula in a cell:
=MAX(B2:B8)
Where B2:B8 is the range of cells that contains the high prices for the period.
To calculate the lowest low, enter the following formula in a cell:
=MIN(C2:C8)
Where C2:C8 is the range of cells that contains the low prices for the period.
Step 3: Determine if a Fractal Has Formed
A fractal is formed when the price has made a higher high or a lower low for two consecutive periods. To determine if a fractal has formed, we need to compare the current high and low prices to the previous high and low prices.
To determine if a higher high fractal has formed, enter the following formula in a cell:
=AND(B3>B1,B3>B5)
Where B1 is the previous high, B3 is the current high, and B5 is the high two periods ago. The AND function will return TRUE if both conditions are met.
To determine if a lower low fractal has formed, enter the following formula in a cell:
=AND(C3
Where C1 is the previous low, C3 is the current low, and C5 is the low two periods ago. The AND function will return TRUE if both conditions are met.
Step 4: Plot the Fractals on a Chart
Once the fractals have been identified, they can be plotted on a chart. To do this, we need to create a scatter plot with the high and low prices as the x and y coordinates. We can then add a trendline to the chart to connect the fractals.
To create a scatter plot, select the high and low prices for the fractal periods and click on the Insert tab. Then click on the Scatter icon and select the type of scatter plot you want to create.
To add a trendline, right-click on one of the data points and select Add Trendline. Choose the type of trendline you want to use and click OK.
Conclusion
Calculating fractals forex in excel is a simple process that can be done using a few basic formulas. By identifying potential areas of support and resistance, fractals can be used to make more informed trading decisions. By plotting the fractals on a chart, traders can visualize the patterns and use them to develop trading strategies.
Where C1 is the previous low, C3 is the current low, and C5 is the low two periods ago. The AND function will return TRUE if both conditions are met.
Step 4: Plot the Fractals on a Chart
Once the fractals have been identified, they can be plotted on a chart. To do this, we need to create a scatter plot with the high and low prices as the x and y coordinates. We can then add a trendline to the chart to connect the fractals.
To create a scatter plot, select the high and low prices for the fractal periods and click on the Insert tab. Then click on the Scatter icon and select the type of scatter plot you want to create.
To add a trendline, right-click on one of the data points and select Add Trendline. Choose the type of trendline you want to use and click OK.
Conclusion
Calculating fractals forex in excel is a simple process that can be done using a few basic formulas. By identifying potential areas of support and resistance, fractals can be used to make more informed trading decisions. By plotting the fractals on a chart, traders can visualize the patterns and use them to develop trading strategies.
