The turning points identified by the Fractal Wave Algorithm are used for constructing trend lines and determining support and resistance. These are then combined in the Fractal Wave System, which in turn generates mechanical trading signals. When viewed on price charts, these signals accord well with an intuitive "chartist" reading of trend direction.

The system is applied to weekly price charts, and is therefore very long term. The trends which the system seeks to identify are business cycle moves lasting one or more years. The system is purely technical in nature and ignores news, weather, politics and other "fundamental" factors except as they are reflected in market prices.

A unique Choppiness Index has also been derived from the mathematics of fractal geometry. This indicator distinguishes orderly (trending) markets from choppy (consolidating) markets without regard to market direction and is used to adjust the proximity of exit signals, particularly in markets that have run away from the trend lines generated by the system.

The Fractal Wave System has proven its effectiveness in a wide range of markets and economic environments. This robustness is a direct result of a simplicity based on strong theoretical grounding and the absence of numerical optimization.