Bill Williams Fractals
Fractals are indicators on candlestick charts that identify reversal points in the market.
Usage
Use to mark potential support and resistance levels at local price extremes. Williams Fractals are commonly combined with Alligator lines to filter valid fractal signals.
Background
Bill Williams introduced Fractals in Trading Chaos (1995) as a pattern-recognition tool identifying local price extremes. A bullish fractal is a bar whose low is lower than the two bars on either side; a bearish fractal is a bar whose high is higher than the two bars on either side. Combined with the Alligator indicator, fractals provide entry triggers. — StockCharts ChartSchool
Formula
[ \text{Up Fractal} = \text{High} > \text{High}_{t-1, t-2, t+1, t+2} ]