The Fractal Breakout is the least aggressive of the five Bill Williams indicators. It encompasses a series of market moves and is often used to confirm a buy or sell signal. The first move outlined by the system occurs when a market has made a new high or low. Next, the market reverses and retreats to prior levels. Finally, the market trades out of its old range again, this time even farther.
The system suggests that traders put on positions immediately, if the market moves beyond the most recent fractal, with a buy stop entered one tick beyond the fractal. Additionally, if the market forms another fractal in the same direction as their current position, the system recommends that traders aggressively increase their positions.
•Leverage: Indicates 2 fractals in the opposite direction. If checked, signals will appear less often. Specifically, they will not be indicated if the leverage line is broken.
•LeftLevel: Used to determine how many consecutive highs lower than the high for the current bar should occur before placing an indicator on the chart. Highs equal to the current high are not included. If Leverage is checked, then the highs should be greater than or equal to the nearest RightLevel low.
•RightLevel: Used to determine how many consecutive lows higher than the low for the current bar should occur before placing an indicator on the chart. If Leverage is checked, then the lows should be less than or equal to the nearest LeftLevel high.