Fractals: description, adjustment and application

All markets are characterized by stability of prices during the long period of time and only sometimes (15-30 % of the time) trends` changes can occur. The most profitable periods are when prices at the markets change according to the definite trend.

Fractals - one of five Bill William`s indicators which allows to detect bottom or top. Technical determination of upward fractal is range of minimum 5 consecutive bars where two bars with lower maximums are placed before and after the highest maximum. Contrary configuration (range of five bars where two bars with the higher minimums are before and after the lowest minimum) is downward fractal. At the chart Fractals have values High and Low; they are indicated by the down and up arrows.

Signals of technical indicator Fractals should be filtered by the technical indicator Alligator. In other words, you should not buy if Fractal is lower than Alligators` teeth, and you should not sell if Fractal is above the Alligator`s teeth. After the Fractal signal is formed and has its power, which is confirmed by its position outside the Alligator`s mouth, it stays as a signal until it is stricken or until new Fractal signal appears.