Williams Fractal Indicator Guideline

Williams Fractal MT4 indicator is a technical indicator created by the trader, author, and trainer with more than 50 years of experience trading in various markets “Bill Williams” in his book ” Trading Chaos”. Bill Williams said that he sees the market as having 5 dimensions that can help Forex traders to understand the market structure. MT5 Williams fractal indicator is one of the five standard indicators developed by Williams and is available by default on various trading platforms. It is very useful as it enables Forex traders to determine the height and low in the chart. In this course, we will discuss the Williams fractal indicator for Tradingview and MetaTrader platforms.

Williams Fractal Indicator

What is William fractal indicator?

Fractal is a phenomenon that can include any number of successive candlesticks but the minimum is 5. In fact, there are two types of fractals. The first one is an upward or bearish fractal which represents the highest high in the middle and 2 lower highs on the sides. The second is downward or bullish fractal, it is an opposite composition of the first one, which represents the lowest low in the middle and 2 higher lows on the sides. Moreover, Williams fractal displays arrows in the chart which help Forex traders to determine the top (upward arrow) and the bottom (downward arrow) of a financial instrument. Therefore, this strategy helps traders to determine the direction of the price movement and possible reversions.

 how does it work?

Williams fractal MT4 indicator is very useful since it provides an entry technique and offers stop-loss levels. In addition, fractals are support & resistance zones. However, it gives significant levels over a longer period of time. Also, it enables you to determine the trend. It is preferable to use this indicator in combination with the Alligator indicator to better understand fractals and trade profitably. But there are some rules that you need to follow when combining the Alligator. firstly, you should not conclude a long position if a fractal is below the  Alligator’s teeth. Secondly, you should not conclude a short position if a fractal is above the Alligator teeth. Also, keep in mind that fractals lag the market as they take time to form.

Another thing that we want to tell you is that according to Williams’s book “trading chaos” it is not necessary that a fractal possesses five bars. But for a reason that we don’t know this combination was included among the standard indicators in the MT4 platform and became very popular. 

How to use Williams Fractal ?

Williams fractal MT5 indicator is available by default on MetaTrader platforms under the Bill Williams category as shown in the picture below. So there is no need to download it. Forex traders use this MT5 indicator in various manners. Some use it to verify bearish and bullish trades. Others employ it to determine the highest and lowest points. there are those who use it to determine entry and exit signals. Also, there are some who use it as a complement to other indicators like RSI, while other traders utilize it to find stop-loss and take profit orders. Furthermore, fractals can be used to find potential breakouts areas. To do this you need to compare the current level of the fractal with the prior one. However, when the price exceeds the last upward fractal, a buy breakout happens. While if the price falls below the downward fractal, a sell breakout occurs. 

Bill Williams category

How to trade with Williams Fractal ?

To trade with Williams fractal Tradingview indicator is very easy. After the fractals are formed, the indicator appears directly on the chart by displaying arrows above and below the highest or lowest candlesticks. These arrows emerge above the third bar if it corresponds to a bearish fractal. And called buy arrow as it acts as a resistance, which means that when the price moves over this fractal a buy signal will happen. Besides, the arrows emerge below the third bar if it is a bullish fractal, which named sell arrow. This sell fractal serves as a support, which means when the price move below this level a sell signal will occur.

Bill Williams clarifies more this theory. Therefore, he said when two candlesticks in the combination contain maximums and both of them are highest, then we don’t take into account the second one in calculating the fractal. The same for the downward fractal.

Moreover, this indicator on longer timeframes can provide more faithful alerts, but it will exhibit fewer signals.

Bearish and bullish fractal

Pros and cons of using Fractals

Pros:

  • Simple to use and understand, and once you grasp it well you can trade with it profitably.
  • Fit all timeframes.
  • Help to identify likely breakouts zones.
  • Can be used as an additional indicator to determine the trend.
  • In addition to highs and lows, Williams fractal also exhibits possible S&R levels of buy and sell transactions.
  • Available by default in MetaTrader platform.

Cons:

  • It is only useful for the trending market.
  • Fractal indicator lags by a couple of candlesticks because it needs at least 2 candlesticks for a fractal to complete. This means when this indicator provides a signal, it is probably that the price is at another level compared to the signal. 
  • Sometimes can misleading signals.

Other functions of  fractal indicator

  • Fractals as connecting points of trend lines:

Fractals can offer a benefit to forex traders as the other participants in the market utilize the same evident prices to plot trend lines. Therefore, this indicator facilitates determining and connecting the most significant highs and lows to plot trend lines. 

  • Fractals as confirmation of trends:

A new fractal emerges as the trend progresses. If the prior breakout of the fractal fails, we obtain the first sign of price consolidation.

  • Fractals indicate breaking points:

As fractals highlight points where the trend is failed and reversed. A new force can ensue when the price crosses the prior fractal. Thus, trading breakout points is a simple and evident application of the fractal indicator.

Download Williams Fractal indicator for MT4

Williams Fractal MT4 indicator is a tool used by Forex traders to determine trends. It consists of 2 groups of arrows. upward arrow and downward arrow. These arrows appear immediately when you add the indicator to your MetaTrader 4 chart. This MT4 indicator presents a default setting which is a grey 3D arrow as you can see in the graph below. You can change the color of the arrow, for example, green for the up arrow and red for the down arrow.

Williams fractal indicator MT4

Download Williams Fractal indicator for MT5

MT5 Williams Fractal indicator is a technique that defined five successive bars which contain 2 bars before and after a more elevated or more inferior bar. It displays fractals once they are formed in your MetaTrader 5 chart in any timeframe you choose to trade. Keep in mind that this MT5 indicator does not possess any notification capabilities. Therefore you have to keep an eye on your chart.

Williams Fractal indicator MT5

Download Williams Fractal indicator for Tradingview

Williams Fractal Tradingview indicator displays arrows in the price chart which tell you when the fractal is formed. Each arrow appears above or below the third bar. The green above arrows correlate to buy fractal, while the red below arrows relate to sell fractal. This indicator is available by default in the Tradingview platform, but you can also download the custom version. 

Williams Fractal indiactor Tradingview

Conclusion

Wiliams Fractal is an indicator for Tradingview and MetaTrader platform. it is an unusual but useful tool. It can help you to build a profitable trading system. Moreover, Bill Williams has five other technical indicators which are all available by default in MetaTrader platform. Fractal is the least famous one as it provides a different system.

Key takeaways

  • Williams Fractal indicator allows Forex traders to follow the price move.
  • Fractals possess at least five bars, these bars superpose as follows, a highest or lowest bar with two bars on the sides.
  • This indicator exhibits two kinds of arrows in the main chart (up and down arrows).
  • You don’t need to download it, as it is available by default in MetaTrader and Tradingview platform.