## Indicators: |
## Forex Fractals
Bill Williams also gives us his approach to using fractals in trading, which we are going to highlight here as well. But before that, let’s touch ## The basics of Fractals indicator
- a Sell fractal forms at the bottom of the price wave with the Lowest Low in the middle and two Higher Lows on each side; Buy and Sell fractals may share price bars (e.g. use the same bars from the set of 5). ## How to trade with Fractals
Since fractals highlight points at which price failed to hold and therefore reversed, it is logical that once price beats its old fractal, there is a new strength coming. Another way to describe it: fractals help to see the levels of Support and Resistance.
Fractals indicator makes it easy to identify and connect the most significant tops and bottoms needed to draw a trend line. Drawing trend lines using fractals could give some advantage to Forex traders since other market participants might also be using the same obvious price points for drawing trend lines.
In an uptrend we will witness that there are more up fractals broken than down fractals. In a downtrend there will be more down fractals broken. As trend (up or down) progresses a successive break and advance of new fractals will be seen. Should the break of the previous fractal fail, we get a first sign of price consolidation.
Failure to successfully advance past previous fractal puts price on a consolidation path. To avoid an immediate coiling price will attempt to break at the opposite fractal. Should this move also fail to bring results, traders should prepare for a ranging market period till a new successful breakout. ## Fractals trading: Bill Williams' Chaos TheoryFractals indicator is one of five indicators of Bill Williams’ trading system. According to his system, Fractals have to be filtered with the help of Alligator indicator.
• If a Buy fractal is above the Alligator's teeth (red Alligator line) traders should place a pending Buy order few points above the high of the buy fractal; Main rule above all rules when following Bill Williams' method: don't take any signals from other indicators (Gator indicator, Awesome Oscillator, MFI etc) until the first fractal (buy or sell) is formed outside the Alligator's teeth. Such signaling fractals remain valid till a pending entry order is triggered or a new valid fractal is formed (a position will then be re-set according with the new fractal). Consecutive fractals going in the same direction that are formed after the first order if triggered can be used to add on to an open trade.
Download Fractals code: Fractals.txt
## Comments |

wooooooooooooooo needs reading

yes, great detailed info!

it good indicator but it appears not on time ...but it is good

excelente

Main rule above all rules when following Bill Williams' method: don't take any signals from other indicators (Gator indicator, Awesome Oscillator, MFI etc) until the first fractal (buy or sell) is formed outside the

""""""""Alligator's teeth""""""""""

teeth or mouth ?

outside the Alligator's teeth - red line.

There are only LIPS / TEETH / JAW. No Mouth. This trading system is very powerful. Even a little bit late but surely profit. Don't be greedy.

thanks a lot

thanks a lot if possible for you please describe accelaration and awesome oscilator and all of bill williams indicator describe in some sample.

Will be done soon.

excelent

nice, verry helpfull

useless indicator or bad interpretation of its signals, who need buy signal with 30pips retracement, or sell signal with more than 20pips retracement

yes am okay with the explanation thanks

excellent explanation of this complex concept. Job well done.

can you use fractals with fibonaccii retracement aswell with tredline channels

you can email me corey back at ccgg2544()yahoo.com thank you for your insight.

bardzo fajny indykator, też mi się podoba...

wogóle stronka niczego sobie ...

oby tak dalej ;-)

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indicator is very cool, I like it ...

not bad at all site ...

keep up the good ;-)

Thank you.

good info. where would the stop loss be placed though?

Initial stops should be placed behind the closes fractal.

As shown below:

when is actually this fractals show up?

what is the fracrals formula? it doesnt appear on time.

A fractal appears only after 5 consecutive bars has made a required pattern: e.g. for a buy fractal -

where the middle bar will be the highest preceded and followed by two lower neighboring bars on each side.

Here is how it works:

thanks for the info ,please how do you see using the fractal indicator alone,buying when the down fractal appears and selling when the up one appears,pls reply.

Fractals, in my opinion, shouldn't be traded alone.

Above I've shown the method suggested by B.Williams (Alligator indicator + fractals).

Also traders use fractals in combination with many other indicators, where the goal is to get a confirmation of a trend direction and then based on that trade fractal breakouts with the trend.

how do you combine both fractals, bollingerband and aligator for a good trading

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