What is a fractal? This is a simple indicator that was developed by Bill Williams, a great mind in any economic niche. This person has achieved a lot in the field of trading, so it is worth listening to his opinion. It was Bill who developed the fractal and incorporated it into the entire trading system. It is also said that he came up with the name of this phenomenon, which is most likely true.
What Is A Fractal?
Fractal often used in conjunction with the Alligator, which allows to determine the highs and lows of markets. Once fractal appeared, it immediately caused an incredible stir in the world of trading. Not everyone respects and loves this designation. It is believed that Bill used too much unnecessary terminology, which complicates the entire system and he did not finalize it to the end.
Others believe that he simply misused the materials he received. Fractals are extremes on local segments. In mathematics, too, there is a very similar designation, or rather a theory, with an identical name – the theory of fractals. But they are in no way interconnected and do not approach each other. Remember TD-point Demark? Fractals are virtually the same.
Varieties Of Fractals
Fractal has no definite designation, but it has many varieties. Many beginners are confused in them, which is understandable. But we created a table to help you decide:
1. There is the designation of a classic fractal up. It is a combination of five candles, with the average always being above the rest and being the maximum;
2. Fractal down. The five candles never was considered to be a prerequisite, most likely the minimum quantity. Another thing is important here – that the bars are consistently reduced to maximum values. Central bar also doesn’t have to be the maximum, it’s not necessarily at all.
There is a very interesting fact, which everyone should know who is interested in fractals. If you see two identical highs or lows in the same fractal at the same time, you don ‘t have to consider these second ones. This rule was introduced by Bill Williams himself, so there is no point in challenging it.
Basic Tips When Using
There are a large number of rules that were created by Bill Williams or appeared later. It would be inappropriate to put such a large number of laws into an article, so we advise you to familiarize yourself with Bill ‘s work called «Trade Chaos», where everything is described. Modern traders have taken the rule of using fractals with an Alligator indicator, which significantly increases the efficiency of both.
Always look at their joint location, it is a very important factor that will help to conduct the correct trade. Despite everything above described, fractals were never considered popular with traders. They are too difficult to perceive and miscalculate, so no one recommends using them to beginners. If you have experience, why not try?