All markets are characterized by the fact that on the most part the
prices do not change too much, and only short periods of time (15–30
percent) account for trend changes. Most lucrative periods are usually
the case when market prices change according to a certain trend.
A Fractal is one of five indicators of Bill Williams’ trading system, which allows to detect the bottom or the top.
Fractal Technical Indicator it is a series of at least five
successive bars, with the highest HIGH in the middle, and two lower
HIGHs on both sides. The reversing set is a series of at least five
successive bars, with the lowest LOW in the middle, and two higher LOWs
on both sides, which correlates to the sell fractal. The fractals are
have High and Low values and are indicated with the up and down arrows.
The fractal needs to be filtrated with the use of Alligator.
In other words, you should not close a buy transaction, if the fractal
is lower than the Alligator’s Teeth, and you should not close a sell
transaction, if the fractal is higher than the Alligator’s Teeth. After
the fractal signal has been created and is in force, which is
determined by its position beyond the Alligator’s Mouth, it remains a
signal until it gets attacked, or until a more recent fractal signal