Trend trading is probably one of the most logical types of trading strategies. Some traders even go so far as to say that trading the trend is the only way to trade. While there are definitely other trading strategies that work besides trading the trend, trading the trend is probably one of the easiest and most popular types of strategies.
However, the question is how can you trade the trend once you have identified a trending market condition. Well I wouldn't say this is the only way to trade the trend, but retracements trading is definitely a very good strategy. Think of this as buying at a discount in a market that is on the rise. You get the best of both worlds. You trade the trend and you buy low and sell high.
The Gann HiLo Activator Bars
The original Gann HiLo activators are usually shown as a moving average in the table. This is because it is basically a simple moving average of the high or low of the last three candles.
However, the Gann HiLo Activator Bars are not presented as a moving average. Instead, it's a bar above the candlesticks that changes color when the trend direction changes. In fact, it is more similar to the Heiken Ashi candlesticks.
Although the traditional Gann HiLo activators shown as a line and the Gann HiLo activator bars are both excellent trend following indicators, the Gann HiLo activator bars seem to be more useful as an entry signal. This is because the change in the color of the bars could be interpreted as a reversal of the trend. This enables traders to have a specific entry point that is not based on a subjective judgment of whether the trend has reversed or not.
Trading strategy concept
The Gann Bars Forex Trend Trading Strategy is a very simple yet very effective trading strategy. It is a trend following strategy that uses the opportunities that arise from an established trend. These possibilities are shown during the retracement using the Gann HiLo Activator Bars as the basis for the entry.
Since this is a trend following strategy, we would first need to be able to identify the direction of the trend. For this purpose we use the Exponential Moving Average (EMA) with 50 periods. The 50 EMA is a medium-term moving average that is widely used by many traders. To identify the trend, we would need to identify where the price location is relative to the 50 EMA and see if the 50 EMA is falling in the direction of the trend. The steeper the slope, the stronger the trend. Trends with a relatively flat slope should be viewed with caution as this could suggest that the trend is not as strong. This will serve as our trend direction filter.
After identifying a trending market condition, we wait for the price to decline. This short-term retracement should coincide with the Gann HiLo Activator Bars to change color against the trend set by the 50 EMA. This short-term change of direction shouldn't last long if it's actually just a retracement. The Gann HiLo activation bars should be reset to their previous color to indicate that the retracement has ended and the trend direction has resumed. This is where we start trading.
- 50 Period Exponential Moving Average (EMA) (Gold)
- Gann HiLo activator bars
Time window: 5-minute, 15-minute, 30-minute, 1-hour, 4-hour and daily charts
Currency pair: any; Stick to pairs of high volatility and low trading costs for periods of 5 minutes and 15 minutes
Trading session: any; Follow the sessions in London and New York for a period of 5 minutes and 15 minutes
Buy (Long) Trade Setup
- The price should be above 50 EMA
- The 50 EMA should be sloping up, indicating that the uptrend is strong
- Wait for the Gann HiLo activation bars to glow orange to indicate that the uptrend is declining
- Wait for the Gann HiLo Activator Bars to turn blue again, indicating that the uptrend is picking up its direction again
- Enter a buy trade once the Gann HiLo Activator Bars turn blue
- Set the stop loss a little below the Gann HiLo Activator Bars
- Close the trade as soon as the Gann HiLo Activator Bars turn orange
Sell (Short) Trade Setup
- The price should be below 50 EMA
- The 50 EMA should be falling, indicating that the bearish trend is strong
- Wait for the Gann HiLo activation bars to turn blue to indicate that the bearish trend is reversing
- Wait for the Gann HiLo Activator Bars to turn orange again, indicating that the bearish trend is picking up its direction again
- Enter a sell trade once the Gann HiLo Activator Bars turn orange
- Set the stop loss a little above the Gann HiLo Activator Bars
- Close the trade as soon as the Gann HiLo Activator Bars turn blue
As you would see in the examples above, there are some trades on both charts. In fact, the sell chart had three profitable trades using this strategy, if you looked at it closely.
In the right market environment, this strategy is a high probability and high reward strategy. This could enable a high win / loss ratio while also having a high reward-risk ratio. The key, however, is to see if the market is actually strong enough.
It's also important to note that trends usually allow two or three retracements at a time. Trades after the third opportunity should be weighed carefully as this could be the end of the trend train. However, it's not uncommon to find trends that persist four, five, or even more times. It is up to you as a trader to judge whether the strength of the trend is still there and whether it is still worth taking the risk for setups after the third wave.
Forex Trading Strategy Installation Instructions
The Gann Bars Forex Trend Trading Strategy is a combination of Metatrader 4 (MT4) indicator (s) and template.
The essence of this forex strategy is to transform the accumulated history data and trading signals.
Gann Bars forex trend trading strategy provides the ability to spot various peculiarities and patterns in price dynamics that are invisible to the naked eye.
Based on this information, traders can assume further price movements and adjust this strategy accordingly.
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How do I install the Gann Bars Forex Trend Trading Strategy?
- Download Gann Bars Forex Trend Trading Strategy.zip
- * Copy mq4 and ex4 files to your Metatrader directory / Experts / Indicators /
- Copy the tpl file (template) into your Metatrader directory / templates /
- Start or restart your Metatrader client
- Select the chart and timeframe in which you want to test your forex strategy
- Right click on your trade chart and hover over "Template".
- Move right to select the Gann Bars Forex Trend Trading Strategy
- You will see that Gann Bars forex trending trading strategy is available on your chart
* Note: Not all forex strategies come with mq4 / ex4 files. Some templates are already built into the MT4 indicators of the MetaTrader platform.
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