Based on the definition of the fractal indicator as displayed at Investopedia, it appears as though JForex is providing a false signal in the attached example.

JForex Fractal indicator works fine in the above example. It detects highest high and lowest low (tops and bottoms) for each bar.
Indicator's lookback and lookforward is equal to the "Number of bars on sides" specified in the optional parameter.

For example, Fractal(12) checks 12 bars before and 12 bars after each bar, if this middle bar has the lowest low - indicator draws an arrow at the bottom of the bar, if the middle bar has the highest high - indicator draws an arrow at the top of the bar.