Forex fractals: free Forex signals

Fractals is the indicator used in the Forex technical analysis and showing tops and bottoms of price movement on chart. Fractals in Forex provide free Forex trading signals.

Description of Fractals

Originally, fractals are the form, which upon division into parts represents small copy of a whole, that is to say, have the feature of self-resemblance. In his book "The fractal geometry of nature" mathematician Benoît B. Mandelbrot introduced the term Fractals (watch pic. 1)

Picture 1. Mandelbrot's Fractal

Fractals Forex Indicator represents the pattern reflected in the form of house above or under candle. They are formed by the combination of five Japanese candles (bar). Upon that, median candle must have the highest (among the tops) High or the lowest (among the bottoms) Low against two neighbor candles to the right and two candles to the left (watch pic. 2).

Picture 1. Fractals Indicators

Bill Williams is considered to be an author of Fractals Indicator. He says about possible variations of this indicator, for example, that it is possible to set more or less (three) than five candles. Highs (or Lows) of bars must not necessarily descend from the central by degrees, but can simply be below (or above). If Highs (or Lows) of two (central and right) bars are equal, then the right High (or Low) is not taken into account.

Application of Fractals as free Forex trading signals

• Fractals signal  is used in Forex to show bottom and top of price on chart and is applied in "breaking" strategy – when price leaves frames of Fractal. In order to get trading signals, Fractals as a rule shall be combined with Alligator also developed by Bill Williams. Here are the basic rules as per his theory:
• Fractals is effective as Forex signals, if they are formed beyond Alligator's chaps.
• Forex signal for buying is the Fractal formed above “Alligator's teeth”, exit should be made according to the price of the highest maximum of five previous bars (watch pic.3)
• Forex signal for sale is the Fractal formed under “Alligator's teeth”, exit should be made according to the price of the lowest minimum of five previous bars (watch pic. 4

Picture 3. Fractals Indicators, Forex signal for purchase

Picture 4. Fractals Indicators, Forex signal for sale

• Besides, the following factors are to be accounted for in trading:
• Fractals provide free anticipating signals in Forex;
• In trading one always must put oneself in the position along Fractal;
• Fractal is just a signal to enter the market, therefore, one needs to wait for its confirmation, using other methods of technical analysis;
• Fractals are not used to define points for leaving market.