Fractal Support and Resistance Breakout Strategy
Summary
This strategy trades breakouts from support and resistance levels identified with confirmed swing highs and lows. It averages recent pivot highs and lows over a configurable lookback, then uses their difference to create adjusted reference levels. The default lookback is 21 bars.
A bullish state is set when price is above both adjusted levels, and a bearish state when it is below both. The strategy enters long above the latest pivot high in a bullish state, or short below the latest pivot low in a bearish state. It closes positions when the trend state turns opposite. The author notes that pivot confirmation creates a two-bar delay and describes the average high-low distance as part of the level calculation. The document provides code and a method description, but no performance results, market-specific evidence, or testing details; it also depends on the chosen lookback and confirmed pivots.
Key ideas
- Confirmed fractal pivots provide the recent support and resistance reference points.
- The strategy derives an adjustment from the average distance between recent pivot highs and lows.
- Long entries require a bullish state and a close above the latest pivot high.
- Short entries require a bearish state and a close below the latest pivot low.
- Positions close when the trend state reverses, and pivot confirmation introduces a two-bar delay.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.