Ultimate guide on Williams Fractals in crypto trading

In today’s article, we’ll explore one of the most powerful yet often overlooked tools in cryptocurrency trading: fractals. While top crypto traders tend to use fractal levels to identify support and resistance points for trading bounces and breakouts, there’s a more effective way to harness this tool. Hint: the true power lies in breakout trading, not just in support and resistance. In fact, many traders even incorporate fractals into their algorithmic trading bots. We recall using fractals to identify support and resistance when we built our first automated crypto trading bot—and unsurprisingly, it wasn’t among the most successful strategies.

After further research, we've uncovered more advanced ways to use fractals and now feel confident in sharing our expertise with you. It’s no secret that even Skyrexio AI trading bot utilizes fractals to identify potential trading opportunities. By reading this article, you’ll learn how to develop your own cryptocurrency trading strategy—or even apply it to automated trading. Let’s dive in!

How to trade using fractal

Now, let’s dive into the most exciting part of the article: how to trade using fractals. You might be surprised at how simple it actually is. Let’s examine the concept of the fractal start, signal, and stop to understand how it works.

A fractal start occurs when a fractal is followed by another fractal in the opposite direction. The fractal signal is the one that comes after this opposing fractal.

Once we have this two-fractal combination, we can set our sell stop order one tick below the fractal signal and enter a short position if the market reaches that level. Next, it’s time to set the stop loss. After your trade is opened, identify the highest fractal from the last two and place your stop loss one tick above it. There are two possible scenarios, Case A and Case B. Examine these carefully and try to spot these formations on real charts.

Conclusion

Next time we will look inside the fractal and try to understand how to trade during sideways. I think today you could understand that fractal trading is good in trend markets, but it’s not profitable during sideways. Price will hit your order every time and hit stop loss many times before the true trend move. For sure fractal breakout trade guarantees that you will not miss the big trend move, but you will have multiple losing trades in the range bounded market. Next time we will discuss how to avoid it.

Best regards,Skyrexio Team