Ok. Let start one by one.
I assume you are using the 1 day time frame.
It is right. You can see this here:
Market: EURUSD 1 Day
Spread: 4 pips
Swap Number: 1 pip
I set it up with just the basic Fractal indicator that comes with interbankfx MT4. Is this the appropriate setup?
I think so.
There is more info about how FSB calculates fractals in this post.
This posting describes the same strategy also.
Also according to your rules, "When up fractal appears, go long"
Yes. It is correct.
The entry is determined from the "Opening point of the position" slot only.
There are no additional conditions.
We enter long or short every time when the price touches a fractal's top or bottom.
you do it immediately when the little fractal pops onto the screen, you don't wait to make sure it stays or anything.
As I wrote before, FSB plots (calculates) a fractal when it is accomplished. It cannot appear and disappear. It is of great importance for the back test whether we have reliable information about the indicators' values when making a deal.
bar No 1 Highest price - 1.0010
bar No 2 Highest price - 1.0020
bar No 3 Highest price - 1.0030 <-- the top of a fractal up
bar No 4 Highest price - 1.0025
bar No 5 Highest price - 1.0015 <-- the current bar (not accomplished yet)
In this case MT plots a Fractal UP if the current highest price stays below 1.0030, but if the price advances above this level the fractal disappears.
This is not reliable behavior (According to me of course)
A fractal consists of minimum 5 accomplished bars. Before the end of bar No 5 we ARE NOT SURE about this fractal.
We have to trade after the end of bar 5. In bar 6 we are 100% sure if there is a fractal or there isn't.
To apply this strategy you have to point a fractal's top/bottom that is minimum at the third bar behind the current bar. Safety first!!! :-)
according to my charts, you only trade once every 3-7 days approximately.
As we can see the example, we have 1 - 2 deals per week.
"Time in position: 13 %"