Fractal Breakout Strategy part 3 - How to use them on intraday trading
Summary
TLDRPeter from experttrading.co presents a tutorial on utilizing fractals for breakout trades on shorter time frames. He explains that while he doesn't trade fractals directly on daily charts, he uses them for trend confirmation on smaller timeframes. Peter demonstrates how to identify entry points after a fractal breakout, emphasizing the importance of aligning with the trend and using pivot points for trade signals. The video aims to clarify his trading approach and offers practical examples for a better understanding of fractal trading strategies.
Takeaways
- 📈 The video is about using fractals for breakout trades on shorter time frames, as opposed to higher time frames covered in previous videos.
- 📊 Peter from experttrading.co explains that he doesn't trade fractals on the daily chart but uses them for trend confirmation on smaller time frames.
- 📉 He emphasizes the importance of not trading against the trend, and how fractals can be a confirmation tool for trades in the direction of the trend.
- 🔍 Peter demonstrates a specific example where a fractal breakout above the alligator indicator line on the daily chart signals a potential long trade on a shorter time frame.
- 📆 The example given is from March 30th, showing a fractal breakout that could have been used to enter a profitable trade.
- 🧭 He mentions the use of pivot points and the 50-period moving average as part of his trading strategy, especially in a downtrend.
- 🚫 Peter advises against taking a short trade when the fractal has been broken the previous day, indicating a potential uptrend.
- 📍 He illustrates how to enter a trade when the price closes above the pivot point, following a fractal breakout.
- 💰 The video includes a practical example of a profitable trade made by using fractals and pivot points, with specific entry and stop loss points.
- 🔑 Peter concludes by highlighting the usefulness of fractals for early entry into a trend and riding it for profit.
- ✉️ The video ends with contact information for further inquiries and resources on experttrading.co.
Q & A
What is the main topic of the video by Peter from experttrading.co?
-The main topic of the video is how to use fractal breakouts on shorter time frames for trading.
What was the reason Peter decided to make this video?
-Peter decided to make this video after receiving an email from someone who enjoyed his previous video but couldn't see how he applied fractals to take trades on daily and 4-hour charts.
Why doesn't Peter take trades on the daily chart as fractals?
-Peter doesn't take trades on the daily chart as fractals because he uses them as confirmation of a new trend or long/short positions on a smaller time frame.
What is the significance of the fractal breaking above the red alligator line according to the video?
-The fractal breaking above the red alligator line signifies an up fractal, which can be a confirmation to take a long trade on a shorter time frame.
What does Peter suggest about trading against the trend?
-Peter suggests that it's generally advised not to trade against the trend, as the trend is your friend, and trading with the trend can be more profitable.
What is the purpose of using fractals in trading according to the video?
-The purpose of using fractals in trading is to get in early on the start of a trend and ride it for profit.
What trading strategy does Peter mention for shorter time frames after a fractal breakout?
-Peter mentions using pivot points as a strategy for trading on shorter time frames after a fractal breakout.
How does Peter determine the entry point for a long trade after a fractal breakout?
-Peter determines the entry point for a long trade by waiting for the price to close above the pivot point and then take out the high of that bar.
What is the importance of the 50 period moving average in the context of the video?
-In the context of the video, the 50 period moving average is not used for trading off when the market is in a downtrend, unlike the pivot points strategy.
What is the recommended stop loss placement according to Peter's example in the video?
-Peter recommends placing the stop loss at a significant low, in his example about 20-25 pips away from the entry, which would require breaking the pivot and the daily low to reach.
How can viewers get more information after watching Peter's video?
-Viewers can get more information by contacting Peter at [email protected] or visiting his website at experttrading.co.
Outlines
📈 Trading Fractals on Shorter Time Frames
Peter from experttrading.co introduces a video on utilizing fractal breakouts on shorter time frames, as opposed to higher time frames previously discussed. He addresses a viewer's query about the absence of fractal trades in his results on daily and 4-hour charts. Peter clarifies that he uses fractals for confirmation of trends or positions on smaller time frames, demonstrating with a daily chart example where a fractal breakout above the red alligator line signals a potential long trade on a shorter time frame.
📊 Confirmation of Trends with Fractals
The video continues with an explanation of how fractals confirm the start of a trend, allowing traders to enter early and ride the trend. Peter illustrates this with a historical example from March 30th, where a fractal breakout indicated a new uptrend, contrary to the prevailing downtrend. He emphasizes the importance of not trading against the trend and how fractals can provide early entry points for profitable trades.
🎯 Pivot Points and Fractal Strategy
Peter discusses the use of pivot points in conjunction with the fractal strategy, particularly when trading in a downtrend. He explains that instead of using the 50-period moving average, traders can look for a close below the pivot point as a signal for an upward move. Using a specific example from March 31st, 2010, he demonstrates how waiting for a close above the pivot point after a fractal breakout can lead to a successful trade, with the price shooting up significantly.
💰 Profitable Trade Execution
In the final part of the script, Peter describes the execution of a profitable trade using the fractal and pivot point strategy. He details the entry point, the setting of a stop loss at a significant low, and the target profit. The example shows a substantial price increase following the trade entry, highlighting the effectiveness of the strategy and the importance of proper risk management.
Mindmap
Keywords
💡Fral Breakouts
💡Time Frames
💡Confirmation
💡Trend
💡Alligator Indicator
💡Stop Loss
💡Pips
💡Pivot Points
💡Sniper Strategy
💡Entry and Exit Points
Highlights
Peter from expert trading.co introduces a video on using fractal breakouts on shorter time frames.
Previous videos discussed fractals on higher time frames, but this video focuses on shorter ones.
Peter explains he uses fractals for confirmation of new trends or positions on smaller time frames, not for direct trades.
An example is given where a fractal formation on the daily chart is used to confirm a trend on a shorter time frame.
A fractal breakout on the 30th of March is shown as an example of trend confirmation.
The alligator indicator is mentioned for understanding the context of the fractal breakout.
Peter clarifies that he does not trade the fractal breakout alone but waits for a signal on a shorter time frame.
Trading against the trend is discouraged, and fractals are used as a tool to confirm trend entries.
An example from the 31st of March, 2010 is used to illustrate a practical application of the strategy.
Pivot points are discussed as a strategy for trading off them in a downtrend.
A close below the pivot point is identified as a signal for an upwards move in a downtrend.
The importance of waiting for confirmation from the next bar to enter a trade is emphasized.
A specific trade example is detailed, showing how to enter and set a stop loss for profit.
The video demonstrates a profitable trade using fractals without needing time frame alignment.
Contact information and website are provided for more information on the trading strategy.
Transcripts
hi everyone this is Peter from expert
trading.co and this is a video about how
to use fral breakouts um on shorter time
frames I did a videos a couple of months
ago on how to use the fractals on the
higher time frames um and then I got an
email of someone to say they've watched
my video they really like it um but they
can't see anywhere in my results me
taking those trades those those those
big moves on The Daily and the 4H hour
charts so I thought I'd do this little
video to actually show what I personally
do in terms of trading
fractals so here we've got the daily
chart um and I won't take any of these
fractals I wouldn't take any of these
trades as fractals I will actually just
use them as confirmation of either a new
trend or uh long or short on a smaller
time frame so what I will do is give you
a little example here right so when my
say at the moment there is a a fractal
formed and if I draw a line
there on that level you can see that
when the fractal has broken here around
about the 30th of March um it's above
the red alligator line go back to one of
my previous videos to uh to to hear
about the alligators the alligator
indicator so this represent an up
fractal and if you were trading just a
fractal strategy on its own um you could
take a trade up here and it would have
been a good successful TR trade you
would have gone up down a bit formed
consolidation had a nice place to put
your stop loss um and then went up again
put your stop loss there again and then
you got it stopped out for a nice profit
I don't know 300 400
Pips but um that's not what I do what I
actually do is I'll look at this and as
soon as that breaks there I can decide
to take a long trade on a shorter time
frame and I'll wait for a signal there
now the reason this is so
useful is because if I this up a bit as
we can see that since
here um gpusd has really been in quite a
significant downtrend so I mean you can
draw a trend
line uh it's not the most accurate trend
line in the world but it's been in the
downtrend and it's generally advised not
to trade against the trend the trend is
your
friend and if you trade got the into the
trade here which is where my mouse is at
the moment uh you would have been
trading against the trend
so if I just go forward back to that um
right so you would have been trading
against the trend but this is a
confirmation for us CU fractals are
designed to get you in early on the
start of a trend and let you ride it so
here we got in at the start of the
trend and um we could have taken an
uptrade so let me go over here and show
you an
example so this is the same day it's on
the
31st of March
2010 and this is what you see when you
wake up in the morning this is about 4:
in the morning we won't come to the
charts
till about this bar 10 to 6 6:00 in the
morning so what we'll look for is we'll
look for a move up now at this point
because it's in a downtrend you won't be
able to trade off the 50 period moving
average using the sniper strategy that I
have on my YouTube channel uh but you
will be able to trade off the pivot
Points which is another stry that I I I
have explained on another video so let
me just show you how that works so what
we're looking for is we're looking for a
close below the pivot um in order to get
poised for an upwards move so here price
comes down we're looking at Price coming
down because we're looking for a close
below the pivot or a bounce off the
pivot but generally a close below so
here it closes below it confirms
momentum with this bar we won't take a
short because we know the fractal has
been broken the day before so we'll be
looking to this up so what we'll do is
we'll take a trade up when the next bar
this bar here closes above the the pivot
point and then takes out the high of
that bar so now it's taken that out and
we enter an uptrade and as you can see
here price just absolutely shot up so
our first Target profit would I mean
I'll probably put my stop loss here at
about 37 that would be a nice 20 Pips
away 25 Pips away from our entry um the
reason I put there is cuz it's a
significant low it would would have to
break the pivot and the daily low to uh
to get there so price shot up nicely and
shot up once again so that this this was
a good profitable trade just using the
fractals and not actually looking at um
all the time frame alignment that you
that you need for the shorter time
frames so I hope this was useful for
more information contact me uh info@
exert trading.co atuk or go to my
website at expert trading.co for more
information
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