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Fractals

The indicator looks at successive highs and lows of an instrument to determine price trends. It identifies a series of at least five successive bars, with the middle bar being the highest high and then the next two highest highs on either side. Or, on the reverse, the middle bar will be the lowest low with the next two lowest lows on either side. The fractals are indicated with the up and down arrows.

As this is a lagging indicator it is advised that the indicator is not used alone, but rather in conjuction with other indicators. The recommended indicator to use it with is the Alligator.

A bearish factual turning point is identified when there is a pattern of a highest high in the middle and two lower highs on each side.

A bullish factual turning point is identified when there is a pattern of a lowest low in the middle and two higher lows on each side.

Signals in conjunction with the Alligator

  • Do not close a buy transaction if the fractal is lower than the Alligator’s Teeth
  • Do not close a sell transaction if the fractal is higher than the Alligator’s Teeth