Inside Day Candlesticks

Inside Day Candlestick

Only 4 out of the 16 signals generated were valid by showing the 4th candlesticks as an Inside Day. At this point we must point out that the fractal arrow is displayed onto the price chart at the start of the 5th candlestick and not the end, if the extremes of the 5th candlestick go outside the highs or lows of the 3rd candlestick, i.e., higher than a bear fractal central candlestick and lower than a bull fractal central candlestick, the indicator fractal arrow is removed automatically, and we have a false signal. The Exit We have a few options to employ when exiting the trade with this system, and the first one we are going to use is to close the trade at the end of the day.
Inside Day Candlestick

Enter a trade just below the low of the Inside Day Candlestick. Place a stop-loss order just above the high of the Inside Day Candlestick. Exit the trade at the close of the day. The second exit strategy to use with the “Daily Fractal System” is to have a predetermined target of at least the amount of the risk, i.e., if the stop-loss order is 100 points/pips from the entry the target should be at least 100 points/pips. You can also use targets that are twice or 3 times the risk, depending on money management principles. Another exit strategy that can be used is to ride the trade until taken out.
Inside Day Candlestick
When you have entered a long position after day one, move the stop-loss order to just below the lows of that day, and keep moving the order up to the lows of the day until taken out. The reverse applies when in a short position: keep bringing the stop order down to just above the highs of each day as the trade moves down. Eventually the trade will be closed out. There are other exit strategies that can be used, but we will cover just one more for this trading system: The 2 candle low or high.
Inside Day Candlestick
From the screenshot above you can see that on a long trade the low of the last 2 days was used as an exit point for the trade, and likewise on the short trade the high of the last 2 days was used. When you employ this 2 day exit strategy it gives the trade a little more room to manoeuvre and you can ride the position for longer. The “Daily Fractal Trading System” is excellent if you can only trade once a day due to other commitments, but the rules and principles will work on any time frame you choose. With any trading system practice makes perfect and the best way is to first practice on a demo account. You must remember a trading system is a component part of a trading plan and by having a structured, short, medium and long term plan in place your chances of wealth building will be greatly increased.  


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