Fractal Market Structure And Multiple Time-frames

The aim of this thread is to document the fractal structure of various markets and how that structure fits in to higher and lower timeframes but first an explanation to make it easier for anyone who wants to follow along.

I would suggest first watching the two videos the first was made by Technical Fx and posted to their you tube channel and the second from another you tube channel called trading fanatic


Videos deleted


I have been trading using fractal market structure for many years, long before the video presentation made by Technical Fx you tube channel and i have no affiliation to either youtube channels or any other assocociation with them. ( the video is for educational purposes only)

I will not go into a long explanation of how to trade trends, i think the video does that very nicely.

There are no indicators publicly available to define market structure so do not ask.

I do not believe in predictions (if anyone does please send me the winning numbers for next weeks lotto) and neither does this method of trading predict where the market will go next but it does give an indication as the structure evolves as to what the most like direction will be.



What Is Market Structure

Market structure is defined as swing highs and lows , these highs and lows go on to form the trend and corrective patterns. The same structure can be seen on any time-frame in any market.

Any market can have 4 conditions ( this is basic and every trader should know this so i will not go into it in depth)

Uptrend
Downtrend
Correction
Sideways (Ranging)

Why Use Fractal Structure To Trade.

The main purpose of fractal structure trading is to ensure we are trading a swing that is moving with the larger swing trend as you will see later the smaller swing trends can give a false picture of the market and so helps to avoid a trend that may be corrective in nature.


What is Fractal Market Structure.

Every market and time-frame is composed of larger swings and the larger swings are composed of smaller swings.
Eg.



Fractal Structure and Multiple Timeframes

The series of larger swings will have a relationship to the larger time-frame fractal structure and the series of smaller swings will have a relationship to the lower timeframe fractal structure.

Here is the current fractal structure of GBPUSD 4H



The 4h larger degree swings will fit in to the daily larger degree swings as smaller swings , the whole of the 4H larger trend fits in to the daily larger trend as the smaller trend.




Each 4H larger swing when viewed on the lower timeframe , in this example the hour, forms the hourly structure of larger and smaller swings





Trade and Analysis Examples.

Example 1

BitcoinUSD i have omitted most of the smaller swings as it is very time consuming to draw them all.

The base structure for this trade is at the larger degree swing level so there was no need to use multiple timeframes if we had then by taking a look at the larger swing on the 4H we could see the current correction was part of the larger degree upswing.

Here on the 60 min chart we saw the prior down trend broken with the uptrend back in December and the market started to make higher lows and higher highs, within each one of those higher highs and higher lows the smaller degree swings formed a triangle correction around the 4/01/2021 and it was simply a case of waiting for the triangle to break to the upside or waiting for the smaller trend to change to the upside as is explained in the video.

Note how the smaller waves could of been traded after the break of the triangle by switching to the 15 min timeframe and observing the same fractal market structure occuring.








Not All Trends Are Equal.


Trends can be corrective, impulsive or formed within a range , in the next example we will see how to distinguish between the corrective and impusive trends using multiple timeframes.

If you watched the video you will have seen how the trader makes no distinction between what type of trend he is trading so lets see what kind of trend he was trading.

The blue swings are the 4H larger degree swings and the red the smaller degree swings, by dropping down to the 60 minute t/f he was then viewing the internal structure of the 4H small swings but by moving to a larger timeframe to view its fractal market structure we can see that the 4H trend was corrective.





By checking the higher timeframe we can distinguish between corrective/impulsive trends

eg. if the trend your trading is a smaller degree swing within the larger timeframes overall fractal market structure then there is a high possibility that it is corrective

Another example

Audjpy 4H



Audjpy D1


Corrective trends can be traded but it is always best to avoid them unless you are a more advanced trader , to get the best results it is always best to ensure the trend you are trading is part of the higher timeframes larger degree swing.

A very good example is the current daily price action on GbpUsd

The current daily larger swing is moving in the same direction as the weekly larger swing which makes it an impulse wave , if it was moving against the higher timeframe larger swing it would be corrective hence at the very basic level of trading we check the HTF.

Continuation

GBPUSD D1



GBPUSD W1


That is all for the examples and the beginning of this journal, i hope anyone that reads this finds it useful and helps to improve their trading, above all remember money management is key and as i am not a robot i do get losing trades mostly due to my own errors.

The information posted here is for educational purposes only and is not intended to be used for live trading by anyone other than me , any losses incurred by using the information here is at your own risk.

GBPUSD

Currently the Daily is in a minor correction within the weekly impulse wave,looking for another entry to go long from 4H

GBPUSD

Main 4H Trend is up with correction and our correction is part of the higher timeframe larger swing so there is a high probability of a continuation to the long side
Waiting for the break up and first minor pullback

Audusd 4H Main Trend is up with a correction the 4H trend and correction are part of the HTF daily larger swing so there is a high probability of a long continuation, waiting for a break up to the long side and minor pullback for entry.

USDCAD

Main Trend is down with a correction , both are part of the daily larger degree downswing , so there is a high possibility of a short continuation , waiting for the break down and first minor pullback

NZDUSD

Main Trend is up with correction both are part of the higher time frame daily swing i am looking to the long side for a continuation, waiting for break up and minor pullback to long

BTCUSD

Bitcoin is in moving into a 4h larger degree correction as it is moving against the higher timeframe daily swing.

Waiting for DAX analysis, please......

EURGBP

Main Trend Down with correction then break down with minor pullback entry

USDCHF

Main Trend Down with correction , resistance did not break , waiting for break down and first minor pullback

Last leg up is moving against the higher timeframe (d1) larger swing so at the moment is classed as corrective

USDJPY

Main Trend is down but last main swing has broken the upside resistance, might be a fake out , if price breaks down below support will consider short after first minor pullback

EURUSD

Main Trend is up with correction , support remained intact , waiting for a break up with minor pull back for entry

The last swing against the trend is moving against the higher timeframe larger swing so at the moment its classed as corrective.

EURJPY

Main trend is up , first minor pullback has dipped a bit lower than i would of liked but looks good for a long

Gbpjpy

Main trend up but a bit messy, last swing up gave a good first pullback entry minor swing

Welcome to my journal Brixen. I am not 100% confident with analysis on dax as the cycles are very different to currencies but will do my best.

To be fair i do not think these cycles for dax are correct so i have deleted the post,

It looks more likely the hourly is moving into a down cycle with retest and continuation but can not be sure.

When something looks more clear i will post something

You know, I call it the wild horse, the wild one, not easy to understand, better say try to understand its next move, so I get your point.

And Yes, that's why I usually look DAX chart on M30, sometimes M15.
But my horizon could last only few minutes and looking big scenario as you do here it's always a great perspective to check what's going on.

All the best.

Best scenario i can give is start with a larger swing on the 30 min , i have added the last three to this chart then look at the 4 hour to see if the 30 minute swings are impulsive or corrective by looking at their position withing the 4 hour larger degree swing.

So if as you do trade the 30/5 start with the larger swing on the 5 minute and then check the 30 minute current larger swing to see where your 5 minute swing fits in , that way you will know if it is corrective or impulsive then just trade the larger swings on the 5 minute using the 5 minute smaller swings, i only trade the impulsive swings.


eg the last three 30 minute swings


When viewed on the 4 hour the first one down would obviously be classed as corrective the second as a possible long continuation and the third as an impulse within a larger correction that is building on the 4H

I have 2 questions for you.
1st one: is it a DAX or generally speaking, an Indices feature to have a different kind of cycles compared to currencies in your opinion?
and what is the reason for you? maybe Indices are linked to an official hours, while currencies are traditionally 24 hours financial tool?

I have another question for you regarding your last post, but I stopped to ask for now......

The cycles work on every instrument but they are sometimes difficult to interpret on Dax as sometimes it is very erratic in its movement , in that situation i would stand aside and wait for a clearer picture.

A complete cycle can be corrective or impulsive , ideally it is better to use three timeframes to establish which one it is, by using two timeframes we could be trading an impulse in a correction ie abc ,,,, c is an impulse as it is moving in the same direction as the corrective cycle.

Eg gbpusd current 4 Hour swings/cycles are all part of the daily cycle/swing, at this point i know i am trading with the HTF swing but that swing could be a correction in the complete cycle so by looking at the weekly i can see it is moving with that cycle so it must be an impulse , if it was moving against then it would be a corrective cycle.


Feel free to ask anything