Speaker A
This is just going to be the basics on how to use the fractal system. I'm going to treat this kind of like how I do with my one-on-ones where we're going to start with the basics, work our way up,
Learn the basics of the fractal trading system, including waves, vectors, and chart interpretation in this 30-minute bootcamp.
Key Takeaways
- Fractal charts provide a nonlinear view of market price action, revealing patterns missed by linear charts.
- Waves represent market movements between pivot points and are essential for understanding market cycles.
- Higher wave counts show longer-term trends, while lower wave counts are useful for daily trading decisions.
- The vector line helps identify potential continuation or reversal points relative to the pivot.
- Combining wave counts with different time frames enhances the fractal system’s practical trading applications.
Summary
- Introduction to the fractal trading system focusing on basics and gradual learning.
- Explanation of nonlinear fractal charts versus traditional linear charts.
- Definition and analysis of waves, including long and short waves and their relation to pivot points.
- Discussion on wave counts from 1 to 200 and their impact on market trend analysis.
- Use of different time frame aggregations (1 min to daily) to apply fractal waves in trading.
- Introduction to the vector line and its role in predicting market moves relative to pivot.
- Examples of how fractal system data can be used to identify reversals and trend continuations.
- Practical tips on system usage, including handling technical issues and loading more data.
- Insights on combining fractal waves and vectors for both short-term and long-term trading strategies.
- Encouragement to engage with multiple bootcamp sessions for advanced fractal trading concepts.
Chapters
- 00:00Introduction to the Fractal System Basics
- 01:33Understanding Nonlinear Fractal Charts
- 03:09Defining Waves and Pivot Crossings
- 04:41Wave Counts and Data Loading
- 06:09Using Wave Counts with Different Time Frames
- 07:25Vector Line and Market Trend Analysis
- 09:02Examples and Practical Usage of Vector and Waves
- 11:02Additional Tips and System Usage Guidance
Full Transcript — Download SRT & Markdown
Speaker A
and then if you guys have any questions at the end or just during it, if you're, uh, while I'm still going through everything, just type it in chat, but then at the end, we'll let everyone unmute and ask any questions. Um, and
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again, this is going to be more of the basics. Um, we're going to have multiple boot camp sessions, so it'll get more advanced as we go on. So, for starters, if you have access to the system and don't know how to log
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in, you're going to use remote desktop connection on Windows or there is an app you download if you're on Mac. We have videos for both of those. I'll link them in the description if anyone's watching this video later.
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Uh, but now for the actual system. So as many of you already know this isn't a normal linear chart. Basically, that just means when we are at this point on a linear chart say like 470. No matter how
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far left or right you go we're always going to be at 470. Now on the fractal chart you can see the price is going to be over here on the right side.
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If we're right here, we're at 495, but here we're at 472, 449, 464, 502. You get the idea, and so on.
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So, with this, we're looking at more of the pattern of the market and kind of looking at it from a bird's eye view rather than just seeing a linear chart just going up and down. And one way that
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I like to show like this is one of the best examples you can get with the fractals. Um, if you look in the stream real quick, this was a few months back when we were, uh, at all-time highs on QQQ at
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503. So, this is a linear chart and at all-time highs, no matter what strategy you use, you don't have a whole lot of data to play off of at all-time highs. If you're doing ICT, supply and demand, whatever it may be, if we're at all-time
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highs, you have nothing to show how much further we're going to continue to the upside. But on the fractals, you can see we had 1, 2, 3, 4, five reversals at this area, which we'll go over, um, later on.
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And you can use that to play off of for this move to the downside, which you can see the next day, we actually use this to catch I believe it was like 700 or 800%. And we can go over that play a
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little later. Uh, so that's just the basics on the nonlinear part of it all. Next up, we'll go over these things we call waves. So a wave is essentially the time it takes to go from pivot, which is this black line
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in the center, then to its peak, and then back and crossing below pivot. So we have long waves which is to the upside and short waves to the downside.
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This right here is considered one wave. When it crosses pivot, goes to its peak and crosses back below. This is one long wave. Right here is one short wave. We go to the downside, cross back above pivot, that's one short wave. So you
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constantly have these waves going back and forth between pivot. We'll go ahead and take a look at the wave one real quick. And you can choose waves anywhere from one up to 200.
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So on the wave 1, you can see that we're constantly going back and forth between pivot going anywhere from like an H1 to I mean we have some outliers of eight and seven, but it's typically 1 to four.
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And then same thing for downside, you're looking at like 1 to three. And the H and L values are just showing how many candles it took us to get to the high or the low value. So for this example, H4,
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that means this long wave took four candles to get to the peak. We got 1, 2, 3, 4. Same thing for the downside. You have an L4 right here. So you had one candle, 2, 3, 4. So on the wave 1, we're
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constantly going back and forth. Now on say the wave 7, you'll start to notice that we spend a little bit more time on each side of pivot. You got an L15 here, an H11, and we'll increase the wave
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count again to say 20. Now you have an H69, an L29, so on. We'll go to 50 real quick. Also, if you want to load a bigger picture, just increase the days to load. You're just going to be looking
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at more data. Now, you have an H124. You have an L of 11. And then we'll go all the way up to the max wave, which is 200. We'll go on something like 5,000 days to load.
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And you'll start to see once it loads, we have like years on one side of pivot going back and forth, right? So the smaller waves, example, one wave daily.
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We're constantly going back and forth. So I like to use that for okay, where are we going today, tomorrow, possibly the end of this week, right? So we're constantly going back and forth. When you go to the larger
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waves, you're looking at more of the overall trend of the market. As you can see, we spent years on one side of pivot.
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So, just because the wave 200 looks like this, this is on the daily time frame.
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So, typically, you're not really going to use this in your day-to-day. Um, just because it's a lot more of a long-term type of play, but you can still take these higher wave counts and use them in your day-to-day by decreasing the
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aggregation or time frame. So you have the 1 minute, 5 minute, 15, 30, and 60 along with the daily. So for example, if we use the wave 200 on the 5-minute aggregation, this now turns into something where we can start to use it
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on the day-to-day. Same thing for something like the 20 wave, which you're typically not going to use if you're using the daily, but on the five minute, this is one of my go-to time frames to use for trading. So, um, that's the
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aggregation on it. And the next step to go look at is this purple line on the chart. So this is what we call vector.
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When we are above pivot again, this black line in the center and above vector, we look for a move to the upside. As you can see right here, we tested vector, bounced off of it, tested it again here, tested again here, just
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continuing to the upside. Same thing for the downside. When we are below pivot and below vector, we look for continuation to the downside. Now, once we get a cross, so right here, we cross below vector, but we're still holding
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above pivot. We're now going to look for a move to the downside or back to pivot.
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It's not a guarantee. Obviously, uh, outliers happen, but this is what we typically look at or expect to happen.
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Same thing for the downside. When we are holding, uh, below pivot but above vector, we look for a move back to pivot. And one really neat thing you can see is on the 200 wave on the daily, the vector
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plays very nicely here. So, we've currently been in an uptrend, right? And you can see starting from, let me get the date real quick.
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Starting from about in 2023, uh, May 17th we crossed pivot and we were holding above vector and that was at the price of 327 right? Also down here this was where we actually started to get that long confirmation on the cross of
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vector and that was at 297 and you can see for the last almost two years now we were holding above vector the whole time and we actually got a test right here. Let me zoom it in a little
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more. Oh, sorry about that. This won't happen often at all because the servers have been upgraded. But if you do ever get an X like this, just restart the system by clicking the X in the top right and opening it back up again. But
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again, that should not happen often at all. It used to happen all the time when the servers were a lot smaller.
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Does, oh sorry, there's a question. Does a vector value change, uh, the waves data load but keep the aggregation the same? Uh, yes, if you change the waves the vector will change.
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Um, but if you change the days to load the vector should stay the same.
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Okay, back to what I was just showing on the 200 daily. So, right here you can see our vector price. I think it was about 422.3 give or take and this was on August 5th. So, if we go back to tha
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real quick on the chart, oh yeah, pulled up right here. Um, you can see that our low for the day was 423.4 before continuing to the upside.
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And then it did that for the whole trend on the way 200 daily. And then you can also see we got this cross below vector on the 27th of March at 487.
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And obviously now there's the things that you have to deal with like terrorists and all that. But from 487, we're now down to 419. And the wave 200 daily after almost 2 years has now crossed below pivot for the first time. So now
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we're looking at possible downtrend with the pivot and vector us being below that. So that's just one way to use it.
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You can use it on larger time frames and you can also use it on smaller time frames like a vector cross here at 476.
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We then got a continuation down to 473. All right. Um the next thing we will go over are these black dashes on the side.
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So we call these clusters and these are showing the reversal point or the high or low of each wave. So remember a wave is just the time it takes to go from pivot to the high back to pivot. So
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right here we consider this one wave and you can see at the top of it we have a black cluster over here and that's showing that this was the high before reversing back and ending that wave. So you can view these as
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uh resistance and support because these are areas that we've previously reversed at. And when you have there's not really a great example on this one. Let's see.
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load more days real quick. Once you start to see these thicker clusters or a group in a small area, that's showing that we might have potential heavier or resistance or support in that area because we've had multiple reversals there. So, you can
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see we have a few clusters in this area and you have one, two, three, four, five previous reversals there. And that's kind of like the same thing we saw on that example I was showing before with these previous reversals here. You have
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all these clusters and we use that to short this play to the downside. Um, so again, thicker clusters can view as heavier resistance. And then when we have this blank space, that's showing that there haven't really been any reversals in that area. So there's a
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potential that we don't run into that much support or resistance. Uh, so there's all of that. Next up, we're going to go back to the wave 1 daily. We're going to go back to those H and L values you see
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here. So, it's showing us that it took five H's to get to this high and three L's to get to this low. If you go and right click on the chart and go into option analyzer, you're going to see these two
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graphs here. When we are above pivot, we're going to be looking at this left graph. And below pivot, we're looking at the right. And this is showing us how often we continue to the next HRL value with however many
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days you have loaded. So right now we have 200 days loaded. This is going to be pulling data from the last 200 days. So on Friday, this is actually a perfect example. We formed an L2. Now you can see that in L1 you get 100% of
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the time because if we're below pivot you have to form an L1. There has to be at least one candle below pivot. So this is 100%. Then from that L1 about 35% of the time this number right here we
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continue to an L2. And now from this L2 we only continue to an L3 about 15% of the time over the last 200 days. So, this is something you can use uh to get a potential bias on the day using
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confluence for any trades. Um, and when it gets really neat is when you get something I'm going to bring back this example again because it's just pretty much perfect on the fractals. This right here. So, we're at the 10% odds, which
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we'll go over right after this. But, we're also at an H7, right? We have all these clusters here showing we've reversed in this area before. And again, going back to this H7. So, we'll go in and you can see that
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over the last 200 days, if we are in H7, only 2% of the time do we continue to an H8. And if you want to get an even bigger picture, just load more days so you can have more data to look at. So,
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let's say like we go to 2000, you can now go to the option analyzer and now you're looking at the same graph, but it's pulling from the last 2,000 days. So, you have more data to work with. And you can see from this
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H7, we've only continued higher two, three, five, seven times. So only seven times over 2,000 days have we continued to that H8 value. So that's just really good odds. And that's pretty much all the factors are. We're looking at data,
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historic patterns to find potential reversals or continuation. So if we're playing the odds, it's going to work in your favor more times than not, but at the end of the day, it's going to come down to risk management. Outliers do
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occur. So, everyone, just be prepared for that and don't think, okay, well, because we've only continued eight times over the last 2,000 days, it's guaranteed not going to continue.
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Outliers can occur, but this is just how I like to use it. Get that daily bias and use it in confluence for my trades. And you can choose any amount of days loaded. Like, you can go all the
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way up to 15,000. Uh, we're not going to be able to read this chart when it opens. You'll see in a second. It looks kind of like a mess. Yeah. So, like on this, you can't really read it because it's a lower
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wave. So, we're constantly going back and forth. If you want to have the max stays loaded 15,000, it's better to do it on those higher uh wave counts because again, we get more of that trend. Um, but we're not looking at this
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to see the chart. We're looking to look at the odds graph. So in here, go to the same place, let it load, and you can see that over 15,000 days, if you add up these numbers, 9, 15, 18,
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21, uh, 22, 23. So 23 times over 15,000 days, have we continued higher from this H7? Very low odds gives you a potential bias. If you find a nice short opportunity, you can write it out and expect an L1 to form. Uh so that's kind
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of like in-depth on how I like to use option analyzer and you can go through all these stocks on the wave 1 daily and kind of just see okay L2 value how often do we continue and form a strategy
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around that. I know stocky jockey he is one guy that uses that very often. We'll actually take this into our next step.
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He'll pair that with the percent odds you see on the chart and then also the option analyzer of continuing to the next value or his strategy. So, tons of different ways to use the fractals.
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Here's one of them. So, these percent odds you see on the side. You click this button right here to pull them up and then you click this arrow right here, this back arrow to take them away. If they don't go away
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the first time, that just means you click this one too many times. So just keep clicking this until it goes away and your chart's clean again.
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So you have the 80%, 50%, 10 or 20, 10, and five. You also will sometimes have the 2% showing if the data allows it. So this is just saying that when we're above or below pivot, we reach this
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point 80% of the time and then 50%, 20%, 10% and so on. Um, so another way you can view this is if we only reach this point 10% of the time, our odds of continuing higher are 10% or less. Um, and if you have a bunch
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of stacked resistance in a certain area plus it's a 10% odds, that's a potential short play. But you always have to note that there can be outliers. Um, so don't just say because we're at the 10% I'm going to fullport
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shorts and it's going to work. Um, and back again to that great play we were talking about before, you can see we had an H7 very low odds of continuing higher. We had these stack of clusters showing we've
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had multiple reversals here before and we were at the 10% odds showing that it's unlikely that we continue higher. So that is how the percent odds work. So, if we're all good, I'm going to go on to the next
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one. What I chart on QQQ every day is this yellow box chart. And how you chart this, you need to use the wave 7 60 minute. And then you're going to rightclick, go into option analyzer, click this drop down here,
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click buy today's close. You can click this button right here to uh expand it.
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And then click current. So, this yellow box is showing us where the most time is spent. You can see that most of these candles consolidate inside of this yellow box. And then what we're actually looking at is when it breaks
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out, where does it reach on average? So, like let's just say for example, it reaches this point on average. The price is going to be down here. So, we're going to hover over say that area and then look at the price.
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Okay, 424.96. That's our average range. We'd go in, chart out our average range. Do that for upside and downside. Also, the max range, which is just the highest candle. So, we'd go here, chart out whatever that value is. Same thing for
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downside. Um, and then these white dash lines are just all the other candles you see here that isn't considered average range or max range.
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And the reason I pull these is when we these are all candles that are breaking out of the yellow box. and it's the highest or lowest point they reach before reversal. So these are all the highs and lows of the 1 hour candles
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after breaking out of the yellow box. So I chart these out and then you can view them as support and resistance. And you'll see throughout the day that they actually play very well. Um they may not be to the penny, but you can see like
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reversal here. We had some bounces here, bounce off the bottom yellow box, bounce off of average range. Uh same thing here. You had this reversal off of this one. Low a day off of this one. So, I like to chart them and use them in
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confluence for my trading. Uh, we have a question. Let me go back to that real quick. How can I see the dollar amount for imprint value? Are fractal candles updated in real time? If so, how to refresh it to get real-time data? Okay,
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so um futures are 15 minutes delayed. They will be getting live data in the future, but it is very very expensive. So, they need to make sure that there is enough interest and it's actually paying for itself rather than coming all out of
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Russell's pocket like it has been for a while. Um, and for like QQ though, this is going to update constantly, but you have to refresh the chart. So, say market was live right now. All you have to do is
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just anytime you want to see this updated, you would just double click this and then it will refresh the chart and show anything that's changed. But for futures and all that, they do plan on getting live data in the
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future. Just need to see the interest first and have it like self- sustaining so it's not draining their pockets. So yeah, that's the yellow box. Uh we'll go over we'll go step by step in charting it in the next session.
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Uh so don't worry about that. There's also a video on our YouTube that people can check out if they want to do it like right now. Uh, and then the last thing I'll show before, uh, we do any Q&A is just going over one of
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my specific strategies I like to use. And that is going through these three time frames right here. You have the 20-way, 5 minute, 7-way, 5 minute, and 10way 15 minute.
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Now, there's so many different ways and time frames you can use in combinations. You kind of just got to play around with it. See what works for you. Um, and it's just going to come down to screen time
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and how much you use it, you'll start to notice these patterns happening over and over again. And one that I've noticed happening is when you go through these time frames and you find an area that has stacked clusters, stacked percent
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odds, or stacked open states all in one area on all three time frames. Those normally tend to be very supportive or resistive. And I'll chart those out as these gray boxes here. So, for example, on this day, this was what I was showing
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on Twitter. Let me pull that up real quick. So this was like an A+ setup and I'll show the reasoning now. So we had two gray zones as you can see right here.
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Um first off you had uh all the things right here. You can see we had the long median which is something on spread monster. That's something we'll go over in the next session because this one's already about 26 minutes long. Um, so you have the
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long median on the 20wave 5m minute. You had a cluster plus open state at 475.41, which you can see right here. And it was also between the 10 and 20% odds. On the 10-wave 15minut, you had a cluster plus
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open state at 476.10 right here. And then last up on the 7-way 5m minute, you had a cluster plus open state and the 10% odds at 476.41 right here. So we marked that out as this gray zone here. And then you can
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also see we had these white dash lines in between on our yellow box. We shorted on the test of around 476. And when we closed above on this candle right here, that was our stop. We lost about 15%.
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Very simple, straight to the point. Then for the second setup which we were looking forward to was the wall long.
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Again another thing on spread monster which we will go over later. You had the 20-way 5m minute cluster and open state at 479.12 and the 10% odds right here. And then on the 10way 15minute cluster plus open state at
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478.96 and the 10% odds. So that was right here. And then last up 7-way 5m minute 478.83 5% odds right here. So you had that stacked uh resistance in that area and we entered in shorts on the test. We
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got no close above that zone and rode these out for I want to say 300%. Um so that's my specific strategy on how I like to use the fractals. But again, there's so many different ways to use it. Just mess around with it. See what
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you like. See what stands out. And you'll notice these patterns happening over and over again when you're trading with the right data. And for anyone who doesn't have access, we still have some spots available. Um, just DM me after
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this session. You also get a free month of premium when you do sign up for Fractal Access.
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Um, so yeah, if you want any of that, just send me a DM and I will get back to you. Do you use the Thinker Swim Vector?
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Yes, I do. That is on this here. There's a vector on Trading View that Russell's released. And then there's the vector on Thinker Swim. And this can be used for uh helping you stay in trends or finding entries. uh cross above is it's
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essentially the same thing you see on the fractals where when we're above vector we look for a continuation to the upside. It's the same thing with this vector here. Could you explain the waves again real quick? Yeah. So a wave
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is there's short waves and long waves. It's just the time it takes to go from across a pivot to the high and then back to pivot. So that's a long wave. And then a short wave is to cross a pivot to
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the downside, getting to that low and reversing. So each one of those are waves. On the shorter waves, we're constantly going back and forth. So I'm looking through or I'm looking at where are we going today, tomorrow, possibly
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the end of this week. And we're going to just pair that with all the things we're looking at like clusters, percent odds, vector, whatever it may be. And then on the larger time frames, we'll just go from the smallest to the
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biggest. You'll start to see that we have way more trends, year-long trends on this. So, the larger time frames are looking at the overall trend of the market where the smaller ones are looking at today, tomorrow, end of this
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week. But, uh you can use these larger time frames on a day-to-day basis. You just need to decrease the time frame.
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So, go from something like the daily to the 20wave 5 minute. And this is what I like to use just looking for uh day trades. When you say percent odds, do you mean odds of pivot? So percent odds,
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I mean technically it's called percent probable when you pull up the indicator, but this is saying um how often we reach this point when we cross pivot. So when we cross pivot, we have an 80% chance of reaching this point
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right here. and then 20 50% 20% 10% and so on. And if you want access, just send me a DM and we will get you all set up. So is the vector considered the pivot point if price crosses? Yeah. So
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you can see right here that uh one second we zoom in a little bit.
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When we crossed on the 7wave 60 minute, our vector price was [Music] 475.26 give or take, maybe off by a couple cents. And our pivot price now is 475.35. Um, and that's one thing I'll touch on real quick. Just because pivots
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475.35, that doesn't mean we need to get all the way back to 475.35 to cross a book. Like, that would make no sense with us being all the way down at 422 now. Um, it's something that'll get priced into the fractals and we'll get a
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cross above or below. We don't need to reach all the way back to this point to get a pivot cross. Um, but yeah, anything else? Feel free to DM me later. Hope you guys learned something and we will see you
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all in the next boot camp session. Have a good one, guys.
Topics:fractal tradingfractal systempivot pointswavesvector linemarket trendstrading strategiesnonlinear chartstime frame aggregationAscend Trading
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