Fractals is an indicator that detects the higher and the lower limits of the current trend and can predict a possible reversal of the trend. This indicator is a series of at least five successive bars, with the highest high in the middle and two lower highs on both sides. The opposite series is at least five successive bars, with the lowest low in the middle and two higher lows on both sides.
Fractals are mostly used to predict a reversal in the current trend. A shift from a downtrend to an uptrend can be traced when the lowest bar is in the middle of the pattern and two bars with successively higher lows are located on either side of it. A shift from an uptrend to a downtrend can be traced when the highest bar is in the middle of the pattern and two bars with successively lower highs are located on both sides of it. Note that Fractals are more effective when used in conjunction with other indicators such as MA, Fibonacci Retracement, and Alligator.
Methods of use:
| 1. | If a BUY fractal is higher than the red line (Alligator teeth) it is a signal to buy. |
| 2. | If a SELL fractal is lower than the red line (Alligator teeth) it is a signal to sell. |
