Use Wiseman fractals to identify bullish and bearish reversals


NinjaTrader Blog

The Wiseman fractal is one of the easiest reversal signal indicators to read. This indicator does best in trending markets where volatility is low and unevenness is minimal.

Fractal geometry

A fractal is a recurring geometric pattern that gets smaller and smaller with each repetition. Often found in nature, technical analysts have also discovered these patterns in the markets. Fibonacci is a better known example of a fractal pattern in technical analysis.

The Wiseman Fractal Indicator was developed by Bill Williams, who is considered to be one of the ancestors of modern trading psychology. Williams used his expertise in psychology along with applied technical analysis and chaos theory to develop his approach to trading.

How does the Wiseman fractal indicator work?

The Wiseman fractal is represented as simple up or down arrows over historical price data. Bearish reversals are indicated by upward pointing arrows and bullish reversals are indicated by downward pointing arrows.

The arrows or fractals are formed when a certain number of repeated bars are aligned in different ways. This number of repeating bars is configured by the Strength parameter in the Wiseman fractal settings.

Using the Wiseman Fractal with Other Technical Indicators

The following example uses the Wiseman fractal along with the Relative Strength Index (RSI) indicator plotted in the lower panel. The bullish and bearish reversal arrows serve as potential buy and sell points, while the RSI crosses can serve to confirm or disprove the Wiseman fractal thesis.

This is just one of countless examples where the Wiseman fractal can be used in combination with other native NinjaTrader indicators for improved technical analysis. As always, traders should be aware of the financial risks involved and the possibility of losing money. All indicators have the potential to generate false signals and the Wiseman fractal is no exception.

Add the Wiseman Fractal Indicator to your NinjaTrader Chart

  1. Right-click in any diagram
  2. Select “Indicators”
  3. Find “Wiseman Fractal” from the available list of indicators in the upper left section
  4. Add the indicator by double-clicking it and clicking OK

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