Fractal Breakout Forex Trading Strategy With MACD Indicator

This is a fractal breakout forex trading strategy with MACD indicator and here’s how it works:

  • the fractal indicator identifies tops and bottoms of market which are essentially the resistance and support levels respectively and therefore this strategy is a breakout strategy of these support and resistance levels indicated by the fractal indicator.
  • the MACD used in this system is for trend identification.

Indicators Required:

  1. fractals
  2. MACD

Timeframe: 1 hour and upwards.

Currency Pairs: Any

Now, lets go straight to the selling and buying rules of this fractal breakout forex trading strategy with the macd indicator.

Selling Rules

  1. MACD must be below the 0.0 level and this tells you that the market is in a downtrend.
  2. A Fractal forms on at a bottom indicating a support level.
  3. Place a sell stop pending order 1-2 pips (+spread) below the low of the fractal.
  4. Place your stop 2-5 pips above the high of the breakout candlestick that breaks the factal bottom but if that stop loss is too close, then find the most recent swing high and place your stop loss at least a minimum of 2 pips above its high.
  5. Take profit targets should be set a 1:2 times (or greater) than what you risked initially or alternatively, you can use the previous swing low as your take profit target level.

This chart below shows a sell trading setups and what to setups to avoid as well:

Fractal Breakout Forex Trading Strategy With MACD

Buying Rules

Ok, for the buying rules, they are completely opposite of the selling rules. Here they are:

  1. MACD must be above the 0.0 level, this indicates that market is in an uptrend.
  2. A Fractal forms on at a top indicating a resistance level
  3. Place a buys stop pending order 1-2 pips (+spread) above the high of the fractal.
  4. Place your stop 2-5 pips below the low of the breakout candlestick that breaks the factal top but if that stop loss is too close, then find the most recent swing low and place your stop loss at least a minimum of 2 pips below its low.
  5. Take profit targets should be set a 1:2 times (or greater) than what you risked initially or alternatively, you can use the previous swing high as your take profit target level.

This is a chart showing buy trading setups:

Fractal Breakout Forex Trading Strategy With MACD buy setup

Additional Notes On The Fractal Breakout Forex Trading Strategy With MACD

  • as usual with all forex trading strategies that are designed for trend trading, this fractal breakout forex trading strategy will not work well in a ranging market.
  • in an uptrend, if you see any fractal form below a previous fractal, don not take a buy trade.
  • similarly, in a downtrend, if you see any fractal from above a previous fractal, do not take a sell trade.

It would mean the world to me if you can share this forex trading strategy by clicking those sharing buttons below. Thanks

READ  1Hr Forex Trading Strategy With MACD