Forex Fractals



Downloads:



Forex MT4 2 line MACDOriginal fractals: Fractals_Original.mq4

Forex MT4 2 line MACDFractals code: Fractals.txt

Fractals Indicator Forex


Fractals - an indicator introduced by Bill Williams.
Simple and versatile, fractals can be used as a stand-alone indicator or in combination with other Forex indicators.

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


Fractals point tops and bottoms where market reverses.

In order for a fractal to form, there should be a series of 5 consecutive bars where the middle bar will be the highest preceded and followed by two lower neighboring bars on each side:
- a Buy fractal forms at the top of the price wave with the Highest High in the middle and two Lower highs on each side;

- 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 fractal, Sell fractal Forex indicator Buy fractal and Sell fractal share bars

Buy and Sell fractals may share price bars (e.g. use the same bars from the set of 5).

How to trade with Fractals



Fractals as breakout points

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.
Setting a trade at the breakout point is an obvious and simplest application of the Fractals indicator.

Another way to describe it: fractals help to see the levels of Support and Resistance.
There are some S/R levels shown below:

Forex fractals

Fractals as trend line connecting points

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.

Forex fractals

Fractals as trend confirmation

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.

Fractals for trend 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.

Forex fractals consolidating prices

Fractals trading: Bill Williams' Chaos Theory


Fractals 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.

Fractals should be traded the following way:

• 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;
• If a Sell fractal is below the Alligator's teeth traders should place a pending Sell Stop order few points below the low of the sell fractal.
• Don’t take any Buy positions if a fractal is formed below the Alligator's teeth.
• Don’t take any Sell positions if a fractal is formed above the Alligator's teeth.

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.

Forex fractals Bill Williams

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.

Forex Fractals formula

Download Fractals code: Fractals.txt

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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 ;-)

---------------------------------------------
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