Trader DNA Fractal Breakout Strategy Overview

Introduction

• Fractals are essential in powerful price action trading strategies.
• This guide presents a refined fractal strategy aimed to outclass traditional methods.
• Focuses on using fractals smartly to spot key market turning points with accuracy.

Basic Strategy Mistakes

• Beginners often jump into trades as soon as a fractal arrow appears, leading to losses.
• The refined strategy emphasizes waiting for confirmation to filter out false signals.

The Fractal Breakout System

• Fractal patterns help identify upcoming major market moves.
• Arrows appear after two candles have closed, indicating confirmed market patterns.

Step-by-Step Buy Setup

1. Resist the impulse: Wait for confirmation despite the appearance of an up fractal.
2. Confirmation criteria: Price must close above the high of the fractal arrow candle.
3. Multiple fractals in the same area: Indicates a more reliable resistance zone setup.
4. Market analysis: Understand if the overall market shows a bullish trend.
5. Execution: Enter a buy trade once price breaks through the fractal resistance zone.

Step-by-Step Sell Setup

1. Down fractal recognition: Wait for confirmation before committing to a sell.
2. Confirmation criteria: Price closes below the low of the fractal arrow candle.
3. Multiple fractals lining up horizontally: Strong fractal support zone.
4. Execution: Enter a sell trade once the market breaks below the support zone.

Enhancing the Strategy with Moving Averages

• Use 200-period and 14-period moving averages to align trades with market trends.
• The 200-period moving average helps determine the overall trend direction.
• The 14-period moving average provides insight into short-term price movements.

Trading with Moving Averages

1. Determine market trend: The position of the price against the 200-period moving average.
2. Fractal alignment: Ensure fractals and entry candles are on the same side of the moving average.
3. Entry strategy: Wait for confirmation of breakout above/below moving averages for buy/sell respectively.

Avoiding Mistakes in Sideways Markets

• Avoid trades in flat or ranging markets where fractals can be misleading.
• Stick to trend-following rules to maintain consistency and reduce false signals.

Conclusion

• Combining fractals with moving averages increases accuracy and helps traders make informed decisions.
• The strategy is straightforward and includes downloadable templates for ease of use.
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