Fractal Channel
is a simple yet powerful VertexFx client-side indicator script that can be used
to trade breakout strategy or as a reversal strategy.
The Fractal Channel is created by
connecting the upper fractals together, and the lower fractals together. An
upper fractal is a High surrounded by two lower Highs on both sides. Similarly,
a lower fractal is a Low surrounded by two higher Lows on both sides.
A Fractal High is a decisive level at which the market failed to go higher and has exhibited reversal. Similarly, a Fractal Low is a decisive level at which the market failed to go lower and has exhibited reversal. Based on the market circumstances (trending or consolidating), it can form strong support and resistance levels. These levels can be reversal levels in consolidation mode, or breakout levels in trending mode.
A Fractal High is a decisive level at which the market failed to go higher and has exhibited reversal. Similarly, a Fractal Low is a decisive level at which the market failed to go lower and has exhibited reversal. Based on the market circumstances (trending or consolidating), it can form strong support and resistance levels. These levels can be reversal levels in consolidation mode, or breakout levels in trending mode.
The Fractal Channel indicator
requires at least 5 candles, and a valid Fractal Channel - which is the
existence of the red and blue lines.
Beakout trading method:
Buy: Place buy trade when candle has closed above the upper
channel (red) line at close of candle. Do not open buy trade if candle has a
gap-up opening. Place stop-loss below the lower channel (red) line.
Sell: Place sell trade when candle has closed below the lower
channel (blue) line at close of candle. Do not open sell trade if candle has a
gap-down opening. Place stop-loss above the upper channel (blue) line.
Reversal trading methodology:
Buy: Place buy trade when
candle has closed below the lower channel (blue) line at close of candle. Do
not open buy trade if candle has a gap-down opening. Place stop-loss below the
nearest Swing Low. Place profit-target above the upper channel (red) line.
Sell: Place sell trade when candle has closed above the upper channel
(red) line at close of candle. Do not open sell trade if candle has a gap-up
opening. Place stop-loss above the nearest Swing High. Place profit-target
below the lower channel (red) line.
C:\ProgramData\VertexFX Client Terminals\"Company
name"\VTL10\Local VTL Scripts
Then right click on the tree and select refresh or restart your
client station and you will find under VTL local scripts in your client
terminal.
You can check this video that talks about Fractal Channel indicator: