Fractal Breakout Entries with Fixed Take-Profit Targets

Summary

This strategy identifies local price turns by comparing the highs and lows of three consecutive candles. It places a long trigger above the latest bottom fractal and a short trigger below the latest top fractal, then sets a take-profit target the same fixed distance from entry. The described defaults use 107 pips for both distances, and the trigger levels are updated as newer fractals appear. The document frames this as an automated trend-following approach that seeks momentum after a local reversal structure forms.

The document gives no performance results. It lists false breakouts, excess signals in choppy markets, fixed-distance settings that may not suit changing volatility, and slippage as risks. It proposes volatility-based distances, trend filters, market-state detection, and dynamic position sizing as possible refinements. The published backtest settings specify BTC/USDT futures on a daily period over a stated date range, but they do not provide outcomes. The source logic also checks closing prices against trigger prices, so its implementation should be examined before assuming the described breakout entry behavior is faithfully represented.

Key ideas

• A bottom fractal is defined by a middle candle with a lower low than its two neighbors, while a top fractal has a higher high.
• The strategy places long and short triggers a fixed distance beyond the latest respective fractal.
• Take-profit distance is set equal to the entry trigger distance in the described default configuration.
• The document identifies choppy markets, false breaks, fixed distances, and slippage as key limitations.
• The published backtest configuration does not report performance results.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.