"About Top and Bottom Fractals" - Beginner's Science Popularization, experienced traders can take detours.

Top fractals and bottom fractals are fundamental concepts in technical analysis, commonly used to judge changes in market trends.
They are formed by three candlesticks with no overlapping relationships, representing potential signals of high points and low points.

Top Fractal Formation: Among three candlesticks, the middle candlestick has the highest high point, and its low point is also the highest.

Significance: Usually appears in an uptrend, indicating that the upward trend may be ending and serving as a potential short-term high point signal.
Mainly viewed as a take-profit signal for long positions below, and also as an entry point for some short-term short positions, often called short entry signals.

Whether it can be used as an entry point for short positions depends on multiple factors and should be considered comprehensively; this is just one of the reference factors for entry.

Its shape resembles a "pin" character.

Therefore, we need to pay special attention: when top fractals appear consecutively, be especially cautious, as it may indicate an increased possibility of trend reversal.

Bottom Fractal Formation: Among three candlesticks, the middle candlestick has the lowest low point, and its high point is also the lowest.

Significance: Usually appears in a downtrend, indicating that the downward trend may be ending and serving as a potential short-term low point signal.

Shape: Resembles an inverted "pin" character.

Note: Bottom fractals are a sign of trend stabilization, but do not necessarily mean an entry signal; their validity needs to be verified with subsequent market movements.

After a bottom fractal appears, it may indicate a trend reversal from falling to rising, but whether it is truly the bottom and whether to enter long positions must be confirmed through multiple bottom fractal formations.

After the appearance of top and bottom fractals, the market often enters a sideways adjustment phase, re-evaluating the direction, either upward or downward. This is also the theoretical basis for judging whether to enter long or short positions.

Therefore, top and bottom fractals are key tools for identifying trend reversals, but should be combined with other technical analysis indicators (such as support and resistance lines) and market trends for comprehensive judgment to improve accuracy.

The schematic diagrams of top and bottom fractals are as follows.