Fractal indicator was developed by Bill Williams.
Fractals are trend indicators on a candlestick chart that are used to indicate whether there is reversal condition in the market or the market resist to reverse.They are normally indicated by an upward or downward arrow. The upward and downward fractal arrow constitute of two,that is:
- The bullish fractal pattern
-And the bearish fractal pattern.
The bullish fractal pattern signals the trader that the market will move higher while the bearish fractal pattern signals the trader that the market will move lower.
The bullish fractal pattern is marked by a down arrow while the bearish fractal pattern is marked by an up arrow.
When the market will move high, Fractal indicator will come up in 5 successive bar with the highest high bar in the middle and two lower highs on both sides while when the market will move low fractal indicator will come up with 5 successive bar with the lowest low bar in the middle and two higher low on both sides.
This is indicated as in the figure below;
The candlestick chart above shows a fractal indicator. Some fractals are above the candlesticks chart while others are below the candlestick chart. The one above the candlestick chart which is being indicated by red arrows is bearish fractals whose arrows are pointing upwards while the one below the candlestick chart which are being indicated by red arrows are bullish fractals whose arrows are pointing downwards.
The bearish fractals which are above the candle stick chart and whose arrows are pointing upwards are signaling traders to close any position which was upward and to enter a sell position since the market will start moving downwards while the bullish fractals which are below the candlestick chart and whose arrows are pointing downwards are signaling traders to close any position which was downward and enter a buy position since the market will start moving upwards.
Recommendation: If you are a day trader just use 1min,5min,15min, and 30 min timeframe while if you are a swing trader just use 1hr and above timeframe if you want fractals indicator to work well for you
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