Education

THE FRACTAL

Fractal what is it? For our trading purposes and in accordance with Bill Williams, we'll remember that the fractal on the chart is a structure built of bars or candles. Fractal's structure consists of 5(five) bars, where there must be a central bar and two bars on his left and two bars on his right side.

if we place here candles instead of the bars, nothing would be changed, in the sence of fractal's structure.

The fractal directed upside must have a central bar and two bars on his left and on his right with their highs lower than the high of the central bar. Those bars minimums are not important. Relations betweem highs of the 2 bars placed on the left and 2 bars on the right from the central bar are not important. It is important that highs of all left and right bars be lower at least for one pip(point) than the high of the central bar.

The fractal directed downside must have a central bar and two bars on his left and on his right with their lows higher than the low of the central bar. Those bars highs are not important. Relations betweem lows of the 2 bars placed on the left and 2 bars on the right from the central bar are not important.

It is important that lows of all left and right bars be higher at least for one pip(point) than the low of the central bar.

The price level of the fractal's central bar is always an important level of support or resistance for the price movements.

FRACTAL'S FORMS (central bars are in red)

Two or three central bars and sometimes more (here marked in red) always must have the same price level and they are playing the role of ONE central bar. If we have between 2, 3 or more central bars with one price level, another bars not penetrating the price level of the central bars, then we simply don't count them at all(as in the fractal on the right in the second row). The main thing is that we must have in any fractal structure 2 bars on the left and 2 bars on the right from the central bar, and their lows must be higher than the central one or their highs be lower than the central high.