Fractals average breakout [FB]
May 7, 2015
The Fractals average breakout [FB] indicator identifies breakout opportunities by plotting dynamic support and resistance levels based on the average price of recent high and low Williams Fractals.
Usage
The Usage section focuses on identifying potential price breakouts from averaged fractal levels. Traders can use the High Line and Low Line as dynamic resistance and support zones. A breakout occurs when the price closes above the High Line (bullish) or below the Low Line (bearish). The Midline acts as a central value area that can be used for trend confirmation or trailing stop-loss placement.
Common applications include:
- Breakout Trading: Entering a position when the price closes outside the fractal average range.
- Trend Following: Using the Midline to gauge the immediate trend direction relative to historical fractal points.
- Support/Resistance: Utilizing the lines as areas where price may find exhaustion or rejection.
Details
The script calculates the average of the most recent N fractals (up to 10). A fractal is identified using a 5-bar pattern where the middle bar (2 bars back) is the highest or lowest in the sequence. By averaging these specific price points rather than using raw price data, the indicator smoothes out market noise and provides more stable levels for breakout identification.
Settings
- Lookback: Determines the number of recent fractals (1 to 10) used to calculate the average high and low lines.
- Show Midline?: Toggles the visibility of the central line calculated between the high and low averages.
- Show Fractal lines?: Toggles the visibility of the High Line and Low Line on the chart.
FAQ
How do I use the breakout signals?
Breakout signals are typically generated when the price closes above the red High Line or below the green Low Line, suggesting a shift in momentum beyond recent average pivot points.
Can I adjust the sensitivity of the lines?
Yes, by changing the "Lookback" setting. A lower lookback makes the lines more reactive to recent price swings, while a higher lookback creates smoother, more stable levels.
How can I access this tool?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.
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