Fractals (developed by Bill William) are indicators on candlestick charts that identify reversal points in the market. Traders often use fractals to get an idea about the direction in which the price will develop. A fractal will form when a particular price pattern happens on the chart. The pattern itself comprises five candles and the pattern indicates where the price has struggled to go higher, in which case an up fractal appears or lower, in which case a down fractal appears.

An UP fractal formed when a candle has two candles to the right of it with two lower highs and at least two candles to the left of it with two further lower highs. This signifies a bearish turning point.

A DOWN fractal is formed when a candle has two candles to the right with higher lows and two candles to left with two further higher lows. This signifies a bullish turning point.