Technical trading indicators such as the fractal indicator can be used to predict potential trend reversal points in a market. The Williams Fractal Indicator was created by a well-known trader, Bill Williams. Williams introduced the fractal indicator in his book "Trading Chaos," claiming it was based on mathematical chaos theory. A fractal is a repeating pattern in mathematics. Fractal indicators are designed to identify and possibly profit from repeated patterns of price movement that appear across different trading time frames (hourly, 4-hour, daily, weekly, etc.).



Fractal analysis simply involves recognizing a pattern in the price activity of a traded security. Once the pattern has been identified, traders will either buy or sell based on whether the fractal signal is bullish or bearish, hoping to profit from a market reversal.