Fractal Indicator

The Fractal Indicator is a technical analysis tool that uses fractal geometry to identify potential trading opportunities. It was developed by Bill Williams in the 1990s, and it is based on the idea that market prices follow a fractal pattern.

The Fractal Indicator is a complex tool, but it is relatively easy to use. It consists of two lines: the Fractal Line and the Control Line. The Fractal Line is a moving average of the price, and the Control Line is a moving average of the Fractal Line.

The Fractal Indicator is used to identify potential trading opportunities by looking for divergences between the Fractal Line and the Control Line. A divergence occurs when the Fractal Line and the Control Line move in opposite directions.

There are two types of divergences: bullish divergences and bearish divergences. A bullish divergence occurs when the Fractal Line makes a lower low, but the Control Line makes a higher low. This indicates that the market is oversold, and it could be a sign that the price is about to rise.

A bearish divergence occurs when the Fractal Line makes a higher high, but the Control Line makes a lower high. This indicates that the market is overbought, and it could be a sign that the price is about to fall.

The Fractal Indicator is a useful tool for identifying potential trading opportunities, but it is important to remember that it is not a perfect indicator. It is always important to use other technical indicators and fundamental analysis to confirm any trading signals.