The Fractal Swing Trading System is a powerful trading strategy that combines the use of fractals and swing trading techniques to identify profitable trades in the market. The system is based on the idea that markets are fractal in nature and that trends exist at all levels of the market. By using fractals and swing trading, traders can identify these trends and make profitable trades.
In this article, we will discuss the basic information about the Fractal Swing Trading System, the indicators used, and the trading conditions necessary for successful implementation of the strategy.
Indicators Used in Fractal Swing Trading System
The Fractal Swing Trading System uses a combination of indicators to identify potential trades. The primary indicators used in this strategy include:
- Fractals: Traders use them to identify potential entry and exit points in the market.
- Moving Averages: Traders use them to identify the trend in the market and to confirm potential trades.
- Relative Strength Index (RSI): Traders use it to identify overbought or oversold conditions in the market.
Buying Conditions According to Fractal Swing Trading System
- The market is in an uptrend, as indicated by the moving averages.
- A fractal is visible with two lower highs with a higher high after.
- The RSI is below 70, indicating that the market is not overbought.
Once these conditions are ok, traders can enter a long position with a stop-loss order below the most recent fractal.
Selling Conditions
- The market is in a downtrend, as indicated by the moving averages.
- A fractal is visible, with two higher lows with a lower low after.
- The RSI is above 30, indicating that the market is not oversold.
Once these conditions are ok, traders can exit the long position with a take-profit order at the most recent fractal.
Short Selling Conditions
- The market is in a downtrend, as indicated by the moving averages.
- A fractal is visible, with two higher lows with a lower low after.
- The RSI is below 70, indicating that the market is not overbought.
Once these conditions are ok, traders can enter a short position with a stop-loss order above the most recent fractal.
Exiting a short position follows the same rules as exiting a long position, with the opposite conditions.
Conclusion
The Fractal Swing Trading System is a versatile trading strategy that traders can apply to any market and any time frame. By using the indicators and rules outlined in this guide, traders can identify potential trades and increase their chances of success in the market. Remember to use proper risk management and position sizing when implementing this strategy, and to always be adaptable to changing market conditions.