What every line and mark on the chart means.
Adjacent top and bottom fractals connect into a Stroke; strokes then combine by rule into a Segment. In the figure below, every three strokes form a segment—the basic unit for judging moves, drawn more prominently than strokes.
| Element | How it is drawn | Notes |
|---|---|---|
| Fractal | Small dots, red for tops and green for bottoms | Turning points. Can be toggled in settings; turn off when crowded |
| Stroke | Thin grey line | The connection between two adjacent fractals, kept in the background |
| Segment | Thick dark-brown line | Built from strokes; the basic unit for judging pivots and trends |
| Divergence segment | Thick teal line | The segment where strength fails. Only the smallest level is marked; higher-level divergence segments span multiple moves, so no separate line is drawn—only the divergence label |
| Pre-end warning segment | Fluorescent-green dashed line | The active segment's terminating structure has most likely formed (about 95% follow-through in historical samples — a reading of the past, not a promise). Prepare ahead instead of waiting for fixation; once fixed, it returns to the normal segment style. |
A rectangle marks the pivot range.The frame colour marks the level, from lowest to highest: blue, purple, orange, teal and magenta; a dashed frame means the pivot is still extending, a solid frame means it has terminated. Higher levels use wider, fainter frames so they do not overpower price across the screen.
Buy points are green, sell points red.The small corner number shows the level; colour depth shows the type—Type 1 the most solid, Type 3 the faintest.
| Mark | Meaning | When it appears |
|---|---|---|
| 1B / 1S | Type 1 buy/sell point | After a trend divergence is confirmed. At most one per trend |
| 2B / 2S | Type 2 buy/sell point | The pullback confirmation after Type 1 |
| 3B / 3S | Type 3 buy/sell point | After leaving the pivot, the pullback does not return to the pivot range |
Trend divergence: two same-direction pivots A and B appear in the move. Segment a leaves A and enters B; segment c leaves B. If c makes a new low with less strength than a, that is trend divergence: BeiChi is printed on the first bar where weakness shows, and after confirmation it becomes a Type 1 buy/sell point.
Consolidation divergence: with a single pivot, the entering and leaving segments are compared. The pivot body is three segments ending at the third segment's end; the next segment runs opposite to the third, and once it leaves the pivot it is the leaving segment. If the leaving move is clearly weaker than the entering move, that is consolidation divergence, labelled BeiChi_P. Consolidation divergence means a likely pullback into the pivot, but it does not produce a Type 1 buy/sell point, and the label stays on.
Two horizontal bands sit above the K-line.The thick line is the highest-level move in effect, for reading the big picture; the thin line is the operating-level move, for timing entries and exits. Green marks an up trend, red a down trend, grey a consolidation; trends also show how many pivots they contain.
The same price action can be decomposed two ways, switched in the indicator settings. The difference is not right or wrong, but whether you want to work every segment mechanically or watch how far the trend runs.
Chan theory allows one combination rule that breaks no theoretical principle: at the operating level, pivot extension is not defined and consolidation + consolidation joins are allowed, while every level below allows pivot extension and forbids such joins. In practice: use same-level decomposition at the operating level and above to set trading rhythm, and multi-level decomposition below it to watch pivot extension, expansion and divergence for precise entries and exits. This is another form of nested ranges: big levels set the rhythm, small levels set the precision.
| Your situation | Recommended mode | Reason |
|---|---|---|
| Plenty of time, small capital, high frequency | Same-level decomposition | Mechanical execution: trade every segment, miss no swing |
| Watching big trends, larger capital, seeking trend profit | Non-same-level decomposition | Let pivots grow naturally and follow the trend; no rush to trade every segment |
| Balance trends and scalps | Same-level decomposition at the operating level + multi-level one level down | Big levels set the rhythm, small levels set the precision |
| Symptom | Cause |
|---|---|
| The pivot frame is dashed | This pivot is still extending, not yet terminated. Only a solid frame means terminated |
| A ✗ after the level label | This pivot is not local-level. No mark means local-level |
| A divergence label appeared and then vanished | Divergence is a dynamic state and stops holding if strength recovers. For those finally confirmed, the position was mostly fixed at first appearance |
| Higher-level pivots disappeared after switching decomposition mode | N+1 and above are produced only in multi-level decomposition. Same-level decomposition keeps only the smallest-level pivots |
| A blank area on the left of the chart has nothing drawn | Decomposition needs enough confirmed structure to start, begins at the first calendar boundary in the loaded history, and reaches back at most about 15,000 bars. The blank is an expected limitation |
| Endpoints of the most recent strokes changed | Within the most recent few strokes (usually no more than three), endpoint fractals may be rejudged as new bars arrive and the strokes adjust. Structures further left do not move |
| Higher levels do not show Type 1 or 2 buy/sell points | To avoid showing too many trend layers on one timeframe at the cost of readability, Type 1 and 2 points are not shown. Switching timeframes manually gives a better experience. |
| Settings look old after an update | TradingView keeps settings saved on the chart, and new defaults in an update do not override them. Open the indicator settings and click “Reset settings” |
Colours can be switched under “Display scheme” in settings: dark background / light background / custom. The colour and weight options below take effect only in custom mode.