Fractal Market Structure Trade

Entry Logic

• Entry trigger: A specific, repeating price pattern (fractal) that has been observed to lead to a predictable outcome is identified on a lower timeframe (e.g., 5-minute) and the entry is taken in anticipation of the pattern completing.
• Confirmation: The fractal pattern must be identical in structure (though not necessarily in size) to a previously identified, successful pattern.
• Timeframe: Any timeframe, but the fractal must be clear and well-defined.
• Location context: The fractal should appear at a key support or resistance level.
• Market condition: Any, as long as the fractal is clear.

Exit Logic

• Profit target: A measured move based on the height of the fractal pattern.
• Scaling out: Not recommended.
• Trailing stop: Not used.
• Signal failure exit: Exit if the fractal pattern is violated.
• Opposite signal exit: Not applicable.
• Time expiration: The pattern should complete within a specific number of candles.
• Momentum loss: Not a primary concern.

Stop Loss Structure

• Hard stop: Just beyond the point where the fractal pattern would be invalidated.
• Soft stop: Not used.
• Max dollar loss: $80 per trade.
• Max percent loss: 0.4% of account.
• Structural stop: The logical failure point of the fractal.

Risk Management Framework

• Risk per trade: 0.3% of account.
• Daily limit: 4 losing trades.
• Weekly limit: 5% drawdown.
• Max drawdown: 15%.
• R:R requirement: Minimum 4:1.

Position Sizing Model

• Sizing approach: Fixed risk per trade.
• Volatility adjustment: Not applicable.
• Conviction sizing: This is a highly specialized strategy; use a consistent, small size.
• Scaling in: Not recommended.
• Scaling out: Not recommended.

Trade Filtering

• Market conditions to avoid: None, as long as the fractal is clear.
• Setups required: A perfect, textbook fractal pattern.
• Instruments: Any.
• Time restrictions: None.
• Chop/news avoidance: Avoid around news.

Context Framework

• Trend direction: Not a primary concern.
• VWAP relationship: Not a primary concern.
• MA relationship: Not a primary concern.
• Range location: The fractal should appear at a key level.
• Higher TF alignment: Not necessary.

Trade Management Rules

• Breakeven: Not used.
• Scale out: Not applicable.
• Add size: Not applicable.
• Fast vs slow moves: The pattern should complete in a predictable manner.

Time Rules

• Optimal window: Any.
• Times to avoid: None.
• Session notes: This is a pattern-based strategy, not a time-based one.

Setup Classification

• A+ criteria: A perfect fractal at a key level.
• A criteria: A clear fractal.
• B criteria: The fractal is not well-defined.
• C criteria: No fractal is present.

Market Selection Criteria

• Instruments: Any.
• Volume: Not a primary factor.
• Volatility: Not a primary factor.

Statistical Edge Metrics

• Win rate: Low (highly subjective).
• Avg win: High.
• Avg loss: 1R.
• Profit factor: High.
• Expectancy: High.

Failure Conditions

• The fractal pattern fails.
• The pattern is not a true fractal.

Psychological Rules

• Requires a high degree of pattern recognition skill.
• Requires the ability to trade a system with a low win rate.

Advanced Components

• Regime detection: Not applicable.
• Filters: Not applicable.
• Correlation: Not applicable.
• MTF alignment: Not applicable.

Location

• Strongest: At key support and resistance levels.
• Weakest: In the middle of a range.