Fractal Dimension Index (Sevcik/Matulich) - MetaTrader 5 Script - MT4/MT5 Resources

According to the description of the fractal dimension index:

Mandelbrot describes the Fractal Dimension Index (FDI) as a way to measure the "complexity and irregularity" of something. FDI can be used as a stock market indicator.

We can think of market prices as "trends" or "fluctuations." During strong increases, price movements are sharp, sometimes approaching a one-dimensional straight line. If we believed that price should move in a more jagged fractal pattern, we would assume that the almost straight-line movements would end at a point where we would be able to predict with enough accuracy to make a good trade.

After a trend forms, prices often trade within a range for a period of time before moving onto the next trend. Imagine prices trading in a rectangular pattern, zigzagging back and forth at the same points in a two-dimensional flat pattern. Planes, like straight lines, are not fractals, so we might expect price to break out of this range and revert to the status of a fractal.

Therefore, FDI is a method of assigning numbers to lines on a chart. This number will be between 1.0 and 2.0. The closer the price is to a one-dimensional straight line, the closer FDI is to 1.0. The closer the price is to the two-dimensional plane, the closer the FDI is to 2.0.

This version is made exactly as described by the original inventor of FDI (Carlos Sevcik), with one correction: the formula published by Sevcik was reversed. Alex Matulich corrected the error and this version uses the correct calculations.

Attachment download

📎fractal_dimension_index.mq5 (8.47 KB)

Source: MQL5 #20586