Fractal Support and Resistance Breakout Strategy
Summary
This strategy identifies candidate support and resistance levels from local high and low fractals. The accompanying description says each turning point needs two bars of confirmation, so the levels arrive with a delay. Over a configurable lookback, the script averages the detected highs and lows and uses their separation to derive additional levels around the latest fractal points.
The trading rules go long when the trend state is bullish and price breaks above a resistance fractal; they go short when the state is bearish and price breaks below a support fractal. Existing positions are closed when the trend state flips, with the state determined by price relative to the derived levels. The source and description provide the rule mechanics but no market, sample period, costs, or performance results. The confirmation lag can delay entries, and the document does not establish that the fractal or averaged levels predict future breakouts reliably.
Key ideas
- Local fractal highs and lows form the base support and resistance references.
- The author describes a two-bar confirmation delay for identifying turning points.
- A lookback average of highs and lows supplies a distance used to derive additional levels.
- Long and short entries require both a directional trend state and a breakout of the corresponding fractal level.
- The source gives no backtest evidence or trading-cost analysis.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.