WICK.ED Fractals

The WICK.ED Fractals indicator identifies key price pivot points by detecting specific geometric patterns in price action to highlight potential trend reversals or support and resistance levels.

Usage

The Usage section describes how the script can be used, examples should be provided in this section. This tool is primarily used to identify local highs and lows within a trend. Traders often use these fractals to set stop-loss orders, identify breakout points, or determine market structure shifts.

For example, a bullish fractal (upward triangle) appearing below a candle suggests a local bottom, while a bearish fractal (downward triangle) appearing above a candle suggests a local top. When price breaks above a previous bearish fractal, it may indicate a bullish continuation; conversely, a break below a previous bullish fractal may indicate a bearish continuation.

Details

The script is based on the concept of Williams Fractals, which are five-bar patterns where the middle bar has the highest high or lowest low of the group. This specific version, WICK.ED Fractals, allows for more flexibility by offering both 3-bar and 5-bar configurations.

In a 3-bar configuration, a fractal is confirmed if the center bar's high is higher than the bars immediately to its left and right (bearish) or if its low is lower than the bars immediately to its left and right (bullish). In a 5-bar configuration, the center bar must be the extreme point relative to two bars on either side. Because the calculation requires bars to the right of the signal to confirm the pattern, the shapes are plotted with an offset to maintain historical accuracy.

Settings

• Periods: Determines the lookback and lookahead window for fractal detection (default is 2).
• 3 or 5 Bar Fractal: Allows the user to toggle between a 3-bar pattern (requiring 1 bar on each side) or a 5-bar pattern (requiring 2 bars on each side) for identification.

FAQ

How do I interpret the triangle shapes on the chart? A downward-pointing red triangle above a bar represents a bearish fractal, indicating a potential resistance level or local peak. An upward-pointing green triangle below a bar represents a bullish fractal, indicating a potential support level or local trough.

Why do fractals appear a few bars late? Fractals require confirmation from subsequent price action. For a 3-bar fractal to be confirmed, the bar following the peak must close. For a 5-bar fractal, two bars must close after the peak. This necessitates a plot offset to ensure the signal is placed on the correct historical candle.

How can I access the WICK.ED Fractals tool? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.