Bill Williams Fractals for Reversal and Breakout Reference Levels
Summary
The document describes a Bill Williams fractal indicator for marking local highs and lows. A high fractal is a middle bar whose high is at least as high as the surrounding bars in a five-bar window; a low fractal is defined conversely by the middle bar having a minimum low. The provided logic uses a centered window and plots the detected levels for chart display.
The author lists several possible uses: identifying reversal areas, monitoring breakouts beyond recent fractal points, and drawing trend lines between successive fractals. These are presented as applications rather than tested strategies. Because the middle bar must be compared with bars that follow it, a fractal is only confirmable after those later bars have formed; this creates a delay that matters for backtests and live signals. The document offers no entry, exit, position-sizing, or performance analysis, so the plotted levels are best understood as technical reference points whose trading value must be evaluated separately.
Key ideas
- A high fractal marks a local high within a five-bar pattern centered on the candidate bar.
- A low fractal marks a local low using the same centered-window concept.
- Fractal levels can serve as reversal references, breakout thresholds, or anchors for trend lines.
- Confirmation depends on subsequent bars, so signals are delayed relative to the middle bar.
- The document does not provide tested entry, exit, or risk rules.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.