Fractal SMT Playbook

Trade Assessment

LIVE

Count Confluences Per Cycle

Yearly

5 pts

PQH/PQL

Bear

Bull

QUIET

Quarterly

4 pts

PMH/PML

Bear

Bull

QUIET

Monthly

3 pts

PWH/PWL

Bear

Bull

QUIET

Weekly

2 pts

PDH/PDL

Bear

Bull

QUIET

Daily

1 pt

Session H/L

Bear

Bull

QUIET

Session

0.5 pt

90m H/L

Bear

Bull

QUIET

Chain Analysis

(must reach selected cycle)

Year Qtr Mon Wk Day Sess

Higher TF

Session

Lower TF

▼ BEAR CHAIN

0 pts

Year

-

→

Qtr

-

→

Mon

-

→

Wk

-

→

Day

-

→

Sess

-

▲ BULL CHAIN

0 pts

Year

-

→

Qtr

-

→

Mon

-

→

Wk

-

→

Day

-

→

Sess

-

Position

$

Need

—

Have

—

Conviction Score

Select direction above

Entry

Stop

Adding

Trail

Position Size

Targets

At TP1

At TP2

Exit Triggers

If Conviction Upgrades

If Conviction Drops

⛔ Trade Invalid If...

🚫 Don't Do This

👁️ Watch For (Edge Cases)

📖 Quick Reference: Cycle States

QUIET — 0 confluences. No signal.

LEANING — 1 confluence. Weak signal.

CONTESTED — Both sides have 1. Wait.

DIR BULL — 2+ bull. Confirmed bullish.

DIR BEAR — 2+ bear. Confirmed bearish.

PURGED — 2+ both. Fuel, defer to parent.

Confluence Types

Standard SMT (1 Confluence)

Wick divergence at quarter extreme

Any commitment mismatch involving wicks (wick vs nothing, wick vs close, etc.)

Hidden SMT (1 Confluence)

Body divergence (closes only)

2 closes vs 0, 1 close vs 0, or 2 closes vs thick wick (after resolution)

Divergent Candle (1 Confluence)

Parent TF candle sweeps child swing

4H PC sweeps 1H swing = Weekly confluence. Must sweep within 2-quarter window.

SMT Validation

Premium/Discount Filter

⚠️ Mixed zones = SMT doesn't count

PREMIUM → count BEAR SMTs at highs

DISCOUNT → count BULL SMTs at lows

All assets (NQ, ES, YM) must be in same zone

Commitment Spectrum

STRONGEST WEAKEST

2 closes

1 close

thick wick

wick

nothing

HIDDEN (body)

STANDARD (wick)

The 7 Cycle States

QUIET 0v0

BLOCKS

No SMT, no PC. Chain broken.

Chain broken - needs SMT or PC bridge

BRIDGED 0v0 + PC

+0 pts

No SMT, but PC bridges the gap.

Chain continues. PC = structure, not commitment.

LEANING 1v0

+0.5 / -0.5

Touched once, not confirmed.

+0.5 if supporting, -0.5 if opposing

CONTESTED 1v1

NO TRADE

Both sides touched. Battle in progress.

WAIT - Don't trade through this!

DIRECTIONAL 2+ vs 0-1

BASE or +1

Confirmed direction. 2+ one side.

Highest = BASE (0.5-5 pts), additional = +1 each

PURGED 2+ vs 2+

+1 fuel

Both sides confirmed. Undirected fuel waiting for ignition.

+1 if DIRECTIONAL can reach it (up first, then down)

Key Rules

1. Chain must connect (SMT or PC)
2. No CONTESTED = don't trade
3. Need 1+ DIRECTIONAL anchor
4. Opposition reduces conviction
5. PURGED → nearest DIRECTIONAL (up first)

DIRECTIONAL Base Scores (Highest Anchor)

Yearly

5 pts

Quarterly

4 pts

Monthly

3 pts

Weekly

2 pts

Daily

1 pt

Session

0.5 pt

Additional DIRECTIONAL below = +1 each | PURGED with valid chain = +1 each | CISD = entry requirement (not bonus)

Conviction Levels

🔥 EXTREME

6+ pts

1-2/mo 75-85% 1:3-1:5

Pattern

Monthly DIR + lower PURGED

Size

Full + can add

Targets

TP1: PDR EQ

TP2: PDL/PDH

TP3: PWR EQ

⚡ MAXIMUM

5 pts

2-4/mo 70-80% 1:2.5-1:4

Pattern

All cycles DIR same way

Size

Full size

Targets

TP1: Session ext

TP2: PDL/PDH

TP3: PWR EQ

💎 HIGHEST

4 pts

4-6/mo 65-75% 1:2-1:3

Pattern

Weekly DIR + alignment below

Size

Full size

Targets

TP1: Session EQ

TP2: PDL/PDH

✅ HIGH

3 pts

6-10/mo 60-70% 1:1.5-1:2.5

Pattern

Good anchor + some QUIET

Size

Full size

Targets

TP1: Session ext

TP2: PDR EQ

⚠️ MEDIUM-HIGH

2 pts

8-12/mo 55-65% 1:1-1:1.5

Pattern

Daily anchors alone

Size

50-75% size

Targets

TP1: Session EQ

TP2: Session ext

❌

MEDIUM / LOW

1 pt or less

SKIP

or scalp only

Trade Management

1 At TP1 (PDR EQ)

✓ Wait for 5m candle CLOSE at/beyond TP1

✓ Wait for pullback (structure forms)

✓ Move stop to structural BE

SHORTS

Stop ABOVE pullback high

LONGS

Stop BELOW pullback low

2 At TP2 (PDL/PDH)

★ DO NOT CLOSE any position

★ Trail 100% of position

★ Use 15m or 1H structure for trailing

★ Target: TP3 (PWR EQ or PWL/PWH)

Why trail everything?

Purged cycles = no resistance. Everyone already stopped out. Let it run!

↑ If Conviction INCREASES

• New confluence your way → Extend to TP3+

• Cycle gets PURGED → Switch to 1H trailing

• HTF confirms → Add on pullback (50% size)

↓ If Conviction DECREASES

• New confluence against → Close 50% immediately

• Cycle goes CONTESTED → Close 100% at market

• HTF flips against → EXIT immediately

Adding to Position

When to Add

New confluence forms your way + price pulls back to OB/FVG

Example: You're short, price drops to TP1, new bearish SMT forms at a lower high, price retraces to that swing's OB → Add here

Max Adds

2 separate pullback entries

Each add = 50% of original size

Lock-Profit Stop (after adding)

Set stop where you STILL PROFIT if stopped out:

Entry: 2 contracts @ 25,000 | Add: 1 contract @ 24,930
Stop @ 24,950 → If hit: +100 pts on Entry, -20 pts on Add = +80 pts profit

Exit Urgency Levels

CONTESTED (1v1)

Cycle has 1 bear + 1 bull confluence

Battle in progress - could go either way. Close to protect gains.

HTF FLIPS AGAINST

HTF now has 2+ confluences AGAINST you

Your thesis is DEAD. Confirmed reversal. Exit NOW.

1 At TP1 (Session Extreme)

✓ Wait for 5m candle CLOSE at/beyond TP1

✓ Wait for pullback (structure forms)

✓ Move stop to structural BE

SHORTS

Stop ABOVE pullback high

LONGS

Stop BELOW pullback low

2 At TP2 (PDL/PDH)

★ Close 50% of position (lock profit)

★ Trail remaining 50%

★ Use 15m structure for trailing

★ Target: TP3 (PWR EQ)

↑ If Conviction INCREASES

• Cycle gets PURGED → Upgrade to EXTREME rules

• Don't close 50% at TP2, trail everything

• Switch to 1H trailing structure

↓ If Conviction DECREASES

• HTF weakens → Close 75% at TP2 (not 50%)

• Cycle goes CONTESTED → Close 100% at market

• HTF flips against → EXIT immediately

Adding to Position

When to Add

New confluence forms your way + price pulls back to OB/FVG

Example: Price hits TP1, new SMT forms, retraces to OB → Add

Max Adds

1-2 separate pullback entries

Each add = 50% of original size

Lock-Profit Stop

After adding, set stop where you still profit if stopped out. Never let an add turn a winner into a loser.

1 At TP1 (Session EQ)

✓ Wait for 5m candle CLOSE

✓ Move stop to BE (can use exact entry or structural)

SHORTS

Stop ABOVE pullback high

LONGS

Stop BELOW pullback low

2 At TP2 (PDL/PDH)

★ Close 75% of position

★ Trail remaining 25% as runner

★ Use 5m structure for trailing

Small lottery ticket

75% secured, 25% for bonus if it runs

↑ If Conviction INCREASES

• Monthly becomes DIR → Upgrade to MAXIMUM rules

• Cycles get PURGED → Upgrade to EXTREME

• Consider adding on pullback

↓ If Conviction DECREASES

• Cycle weakens → Close 100% at TP2, no trail

• Minor conflict → Tighten, close at TP1

• CONTESTED → Close 100% at market

Adding to Position

When to Add

New confluence forms your way + clean pullback

Only add if conviction has room to upgrade

Max Adds

1 pullback entry only

Add = 50% of original size

Lock-Profit Stop

After adding, set stop where you still profit if stopped out.

1 At TP1 (Session Extreme)

✓ Wait for 5m candle CLOSE

✓ Move stop to BE

SHORTS

Stop ABOVE pullback high

LONGS

Stop BELOW pullback low

2 At TP2 (PDR EQ)

★ Close 100% of position

★ No trailing - job done

Solid trade, don't push it

Take the profit, look for next setup

↑ If Conviction INCREASES

• QUIET becomes DIR your way → Upgrade rules

• Now plan to trail at TP2

• Adjust targets up

↓ If Conviction DECREASES

• Slight conflict → Tighten, close at TP2

• Anchor weakens → Consider closing at TP1

• CONTESTED → Close at market

Adding to Position

Only if conviction upgrades. Otherwise, don't add - manage what you have.

1 At TP1 (Session EQ)

! Move to BE on touch (don't wait for close)

! Protect faster - lower conviction = faster protection

Be more defensive

Less edge = tighter management

2 At TP2 (Session Extreme)

★ Close 100%

★ Don't push for more

↑ If Conviction INCREASES

• HTF gets confluence → Upgrade to HIGH+

• Can increase position size

• Extend targets to PDL/PDH

↓ If Conviction DECREASES

• More conflict → Tighten hard, close at TP1

• Don't wait for TP2

• CONTESTED → Close immediately

DO NOT ADD

Unless conviction upgrades significantly. Reduced size trade = don't compound the risk.

⚠️

Remember: 50-75% Position Size

This is not a full conviction trade. Reduce size accordingly.

Target Levels Quick Reference

Closest

Session EQ

90m swing

Medium

Session Extreme

PDR EQ (50%)

Extended

PDL / PDH

PWR EQ / PWL / PWH