The Fractal System will essentially filter out false signals made by the TTM, and subsequently the TTM will filter out false signals made by the Fractals. This is the idea anyway. Still need to test a few things before I give the thumbs up, but so far so good.
The idea is this:
The TTM will typically display after the 2nd bar has closed (keep that in mind when looking at the picture; I would hate to have you think that the TTM bars are displayed at the close of the current bar).
In addition to TTM and the Fractal indicators we use a method called 2nd Bar Low/High. This method involves using the high and the low of the two previous bars to determine the entry and exit points: for example, if price passes the High of the two previous bars, then that would be our entry point, and the stoploss would be the Low of the two previous bars (vice versa for price passing the Low of the two previous bars).
This 2nd Bar Low/High is kind of what my Fractal Dimension Channel/Histogram does, only it's a little more selective. So I will be using the 2nd Bar Low/High mostly for stoploss values, and the Fractal Indicators as my entry points.
Setup is this:
- When TTM displays a Orange or Green Bar, we wait for the Fractal Histogram to display a Red or Blue Bar for our entry.
- Stoploss is the 2nd Bar Low/High;
- TakeProfit (70% of order) is set a the next support level, or just 10-30 points from entry;
- Remainder of the order (30%) will be trailing the 2nd Bar Low/High stoploss for any further profit points.
