Forex traders make money when currency rates change. However, the market remains stationary most of the time; there are trends only 15% to 30% of the time. Therefore, it’s important to know when a trend is likely to develop.
The Fractal pattern is one of five indicators developed by Bill Williams. It’s used to detect tops and bottoms in trends. It’s defined as follows:
- It consists of at least five consecutive intervals
- A buy Fractal occurs when the middle interval is the highest of the five intervals
- A sell Fractal occurs when the middle interval is the lowest of the five intervals
- Don’t buy if the Fractal is below the Alligator’s teeth
- Don’t sell if the Fractal is above the Alligator’s teeth
You can find more information about technical indicators in the MetaTrader 4 User Guide. Select Help > Help Topics > Analytics > Technical Indicators.