Fractals

A fractal is a pattern in which the same configuration occurs throughout the structure, on a variety of different scales. In other words, it’s a pattern that can be subdivided into similar patterns similar to each other and to the parent pattern.

Just like it’s possible to find Fibonacci ratios in nature, fractals also occur quite often – in plants, crystals, snowflakes, etc.

The idea of fractals was applied to financial markets by Bill Williams. According to him, complex moves of the market are made of self-similar recurring patterns. As a result, although the dynamics of the price may seem random, it’s actually not and has a specific structure.

Fractal trading

So if we get to the charts, a fractal is considered to be a pattern formed by at least 5 candlesticks in a way that the high/low of the central candlestick exceeds the extremes of the neighboring candles.

A fractal up is a series of five consecutive candlesticks (bars) where the highest high is preceded by two lower highs and is followed by two lower highs. The opposite configuration would be a fractal down. Both structures look like small reversals of the price. Both fractals (buy and sell) may share candlesticks.

fractal up and fractal down

It is not an easy task to constantly track fractals visually. You can have fractals marked on your Metatrader chart by clicking “Insert”, choosing “Indicators”, "Bill Williams" and then “Fractals”. The indicator will add a sign at the middle bar of every fractal it recognizes.

How to trade using fractals?

After you added the Fractals indicator to a chart, you can hunt for trade signals. Here’s the method proposed by Bill Williams:

  1. Wait for a situation when the latest fractal is pointing in the opposite direction from the previous one. This is called a fractal start. The trade should be in the direction of the second fractal.
  2. A trading signal will appear if the price goes beyond this fractal (i.e. its middle candlestick).
  3. Put a Stop Loss beyond a fractal stop, which is the furthest point from either of the previous two fractals in the opposite direction to the signal.

fractal signals

The Fractals indicator can produce a lot of signals. It’s wise to use it together with other technical indicators developed by Williams in order to filter the good signals from the bad ones.  

Frequently asked questions

  • How to open an FBS account?

    Click the ‘Open account’ button on our website and proceed to the Personal Area. Before you can start trading, pass a profile verification. Confirm your email and phone number, get your ID verified. This procedure guarantees the safety of your funds and identity. Once you are done with all the checks, go to the preferred trading platform, and start trading. 

  • How to start trading?

    If you are 18+ years old, you can join FBS and begin your FX journey. To trade, you need a brokerage account and sufficient knowledge on how assets behave in the financial markets. Start with studying the basics with our free educational materials and creating an FBS account. You may want to test the environment with virtual money with a Demo account. Once you are ready, enter the real market and trade to succeed.

  • How to withdraw the money you earned with FBS?

    The procedure is very straightforward. Go to the Withdrawal page on the website or the Finances section of the FBS Personal Area and access Withdrawal. You can get the earned money via the same payment system that you used for depositing. In case you funded the account via various methods, withdraw your profit via the same methods in the ratio according to the deposited sums.

Latest news

AUD: Markets Prepare for RBA Rates Statement.

The Reserve Bank of Australia (RBA) is widely anticipated to maintain its current interest rates at 4.35% following its two-day meeting concluding on Tuesday. Despite holding rates steady since December, the RBA has hinted at the possibility of further rate hikes due to persistently high inflation, which has exceeded its target range of 2% to 3%.

Coinbase and Marathon. Instruments of the Week (18-22 March)

Coinbase (#COIN) saw its revenue rise to $773 million in Q1 2024, marking a 23% increase from the previous quarter and surpassing analyst expectations.

XTIUSD Extends Bullish Phase, but Watch for Retracement Levels Before Continuing to Buy!

Bearish scenario: Sales below 80.00 with TP1: 79.60... Anticipated bullish scenario: Intraday purchases above 80.70 with TP: 81.50...

Deposit with your local payment systems

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera