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1/6
A quick note on fractals to clear up some misconceptions that are not helping people.
What are they - Fractals highlight swing points, they are formed when five candles are printed with the central candles high exceeding those either side.
A quick note on fractals to clear up some misconceptions that are not helping people.
What are they - Fractals highlight swing points, they are formed when five candles are printed with the central candles high exceeding those either side.
2/6
The biggest mistake i encounter is people using them as long/short signals. This is really the fault of many erroneous tutorials available online (e.g investopedia) has this wrong. They tell you an up fractal is a signal to go long and vice versa.
Wrong
The biggest mistake i encounter is people using them as long/short signals. This is really the fault of many erroneous tutorials available online (e.g investopedia) has this wrong. They tell you an up fractal is a signal to go long and vice versa.
Wrong
3/6
When an up fractal is printed it is NOT and signal to go long and when a down fractal is printed is NOT a signal to go short
Fractals simply highlight market structure. they indicate that at a certain time price was unwilling to go any higher/lower.
When an up fractal is printed it is NOT and signal to go long and when a down fractal is printed is NOT a signal to go short
Fractals simply highlight market structure. they indicate that at a certain time price was unwilling to go any higher/lower.
4/6
There are many different uses for fractals. Many combinations of indicators to screen signals etc... I like to keep it very simple. In Crypto we can afford to because assets tend towards trending.
I will offer two.
1 - Failure swing entry - see image below
There are many different uses for fractals. Many combinations of indicators to screen signals etc... I like to keep it very simple. In Crypto we can afford to because assets tend towards trending.
I will offer two.
1 - Failure swing entry - see image below
5/6
2 - Trailing stop loss and re-entry
Stops are trailed at fractals. After exiting, if you still like the trend you can trail a re-entry on fractals.
2 - Trailing stop loss and re-entry
Stops are trailed at fractals. After exiting, if you still like the trend you can trail a re-entry on fractals.
6/6
Limitations
Ranges
When you see many fractals being printed without clear highs and lows, price is consolidating. Wait for a clear break of the range.
Initial stop
Initial stop placement is at the previous fractal (often huge). I recommend using an alternative e.g 24hrATR
Limitations
Ranges
When you see many fractals being printed without clear highs and lows, price is consolidating. Wait for a clear break of the range.
Initial stop
Initial stop placement is at the previous fractal (often huge). I recommend using an alternative e.g 24hrATR
