Trading a Fractal Pattern

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:

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.

A trading signal will appear if the price goes beyond this fractal (i.e. its middle candlestick).

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.
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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.