Chaos Fractals Analysis and Trading Signals

Developed & Created by Bill Williams

A fractal is created by three price bars

It's used to detect the bottom or top.

Up Fractal: Defined as a central bar flanked on each side by two lower highs, giving it an 'A' shape.

Up Fractal

Down Fractal - Defined as a central bar with two higher lows on both sides (in a V shape).

Up Fractal

Index Technical Analysis & How to Generate Signals

Breakout Trading

The break out method/technique of using fractals to initiate trades is to take trade positions based on the direction of a price break-out above/below most recent fractal.

Buy Trading Signal

If the market price breaks above the most recent Up Fractal enter long.

Stop-loss placements must be situated beneath the lowest price attained by either the immediate prior Down Fractal or the second most recent Down Fractal.

Buy Signal in Breakout Trading Strategies

Sell Trade Signal

Enter short if the price breaks out below the most recent Down Fractal.

Stop Loss orders must be set above the highest peak of either the most recent Up Fractal or the second most recent Up Fractal.

The Sell Signal Originating from a Break-out Trade

Review Further Directions and Programs:

• Best Trailing Stop Loss Indices Order Indicator
• Coppock Curve Indices Indicator Analysis
• How Can I Add IT 40 in MT4 iPad App?
• RSI Tool for When Prices are High or Low
• Candles Charts, Line Charts & Bar Charts Index Chart Types
• Doji Candlesticks and Marubozu Candlesticks Pattern
• How to Come Up with a Price Action Trading Strategy for Beginner Traders
• Day Indices Platform & Index Platforms