Using Fractal Extremes to Draw Trend Lines and Classify Market States

Summary

This indicator description explains a way to draw bullish and bearish trend lines from the nearest price extremum identified by a fractal indicator. When price breaks a fractal, the corresponding line is retained until a new extremum appears. The description also gives a small set of visual interpretations based on where a candle closes relative to the two lines and whether a pass-through cross has occurred.

The proposed labels include bullish and bearish trends, flat conditions, and an uncertainty triangle. However, one rule appears duplicated: closes above both lines are assigned to both bullish and bearish trends, leaving the bearish condition unclear. The text provides no precise definition of a pass-through cross, entry or exit rules, parameter testing, or performance evidence. It is therefore a chart interpretation aid rather than a complete or validated trading strategy.

Key ideas

• The indicator uses fractal extrema to construct bullish and bearish trend lines.
• A broken fractal line remains in place until another extremum is detected.
• Candle closes relative to both lines are used to classify trend or range conditions.
• The written bullish and bearish rules duplicate the same close condition, making the bearish interpretation ambiguous.
• The description supplies no test results or complete trade management rules.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.