Fractals are a technical analysis tool developed by Bill Williams to identify potential price reversals in financial markets. A fractal is a series of five bars, where the middle bar has the highest high or lowest low, surrounded by two lower highs and two higher lows. This pattern suggests a potential price reversal, where an uptrend could become a downtrend or vice versa. Williams believed that fractals were a key component in his trading system and used them in conjunction with other technical indicators to analyze the markets. Fractals can be applied to any financial instrument, including stocks, commodities, and forex.

Fractals by Bill Williams are a technical analysis tool used to identify potential market turning points. A fractal is a pattern consisting of five consecutive candlesticks. For a bullish fractal, the middle candle has the highest high, with two lower highs on each side. For a bearish fractal, the middle candle has the lowest low, with two higher lows on either side. These patterns suggest possible reversals or continuation of trends. Williams used fractals alongside his Alligator indicator to confirm entries and exits. While simple, fractals help traders spot key support and resistance levels. However, they are lagging indicators, as the pattern confirms only after the fifth candle closes. Fractals are best used with other tools for more reliable signals.