DEMA Gator Trend Forex Trading Strategy

0
388
DEMA Gator Trend Forex Trading Strategy 1

A trader has to be able to anticipate the direction of price movements in order to make money out of the market. Traders might not be right all the time, but they should be able to have enough wins in order to cover for losses and earn profits from the market. But how do traders anticipate price direction?

There are many ways to anticipate price changes. Some traders trade momentum and trend continuation strategies. Others trade mean reversals based on overbought and oversold market conditions. Some trade trend reversals either through patterns, indicators or a crossover of moving averages. There are many ways to profitably trade the market. However, there is also a way to anticipate market movements with easily while increasing a trader’s accuracy. This is through technical indicators.

Technical indicators aid traders in the trading process by giving them a clearer picture of what the market is doing. This allows traders to anticipate the market’s next move with better accuracy.

The DEMA Gator Trend trading strategy is a strategy that makes use of high probability technical indicators, which allows them to profit from the market more consistently.

Double Exponential Moving Average

The Double Exponential Moving Average (DEMA) is a modified moving average indicator introduced by Patrick Mulloy in his article “Smoothing Data with Faster Moving Averages”.

The DEMA is unique compared to the usual moving averages because it tends to reduce lag better, which is the weakness of most moving averages. It removes lag by using multiple Exponential Moving Averages (EMA), making it more valuable as a moving average indicator.

Reduced Lag Moving Average

The Reduced Lag Moving Average is another modified moving average that attempts to minimize lag. It is unclear how this moving average does this, but it does tend to work. Visually, you would notice how this moving average tends to hug price action much closer compared to other moving averages.

Gator Oscillator

The Gator Oscillator is an oscillating indicator developed by one of the most popular traders Bill Williams. This indicator is part of a set of indicators which he uses for his trading strategy.

The Gator Oscillator is a unique kind of trading indicator as it is able to measure trend strength. It does this by printing vertical lines on its own window, which changes colors whenever it detects a change in trend strength.

This indicator proposes four market phases: sleeping, awakening, eating and sated. The initial market phase, which is the sleeping phase, pertains to when the market trend is still weak. The indicator shows this by printing a solid red line. Then, as the market starts to awaken, the line then becomes divided into two colors, red and green. After the awakening phase is the eating phase. During this phase, the market tends to be trending strongly or is confirming the start of a trend. During this phase, the indicator starts printing a solid green line. Lastly, after the eating phase is the sated phase. This is the phase when the trend starts to cool down. This is depicted by a line with a red and green color.

Trading Strategy

This strategy is a crossover strategy that makes use of the DEMA and Reduced Lag Moving Average indicators. These indicators which is more responsive compared to most moving averages allows traders to enter the market as the trend starts to reverse. The entry points are also a tad earlier compared to other crossover strategies which use a lagging moving average.

This crossover strategy is composed of three lines, the mid-term (red) and long-term (blue) moving averages of the Reduced Lag Moving Average and the short-term (yellow) moving average of the DEMA indicator. The entry signal is confirmed only when the short-term moving average crosses above both the mid-term and long-term moving average.

The entry signals should also be in confluence with the eating phase of the Gator Oscillator, which is indicated by a solid green line.

Indicators:

  • reducedlagma
    • MA_Period: 60
    • MA_Sampling_Period: 45
  • DEMA
    • PERIOD: 28
  • Gator Oscillator

Timeframe: 1-hour and 4-hour charts

Currency Pairs: major and minor pairs

Trading Session: Tokyo, London and New York sessions

Buy Trade Setup

Entry

  • The short-term (yellow) moving average of the DEMA indicator should cross above the mid-term (red) and long-term (blue) moving average of the Reduced Lag Moving Average indicator
  • The Gator Oscillator should be printing a solid green line indicating the eating phase of the market
  • Enter a buy order on the confluence of the above conditions

Stop Loss

  • Set the stop loss at the support level below the entry candle

Exit

  • Close the trade as soon as price closes below the red moving average line

DEMA Gator Trend Forex Trading Strategy 1

DEMA Gator Trend Forex Trading Strategy 2

Sell Trade Setup

Entry

  • The short-term (yellow) moving average of the DEMA indicator should cross below the mid-term (red) and long-term (blue) moving average of the Reduced Lag Moving Average indicator
  • The Gator Oscillator should be printing a solid green line indicating the eating phase of the market
  • Enter a sell order on the confluence of the above conditions

Stop Loss

  • Set the stop loss at the resistance level above the entry candle

Exit

  • Close the trade as soon as price closes above the red moving average line

DEMA Gator Trend Forex Trading Strategy 3

DEMA Gator Trend Forex Trading Strategy 4

Conclusion

This trading strategy is a working crossover strategy which allows traders to earn profits from the market during strong trending market phases.

This strategy allows traders to enter the market at just the right time because of the combination of the leading moving average indicators, which has reduced lags, and the confirmation of the eating phase of the market using the Gator Oscillator. By using a combination of these indicators, we get to enter a bit earlier while ensuring that we get to enter the market as the trend strength is confirmed.


Forex Trading Strategies Installation Instructions

DEMA Gator Trend Forex 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.

DEMA Gator Trend Forex Trading Strategy provides an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.

Based on this information, traders can assume further price movement and adjust this strategy accordingly.

Recommended Forex Metatrader 4 Trading Platform

  • Free $30 To Start Trading Instantly
  • Deposit Bonus up to $5,000
  • Unlimited Loyalty Program
  • Awards-Winning Forex Broker

xm account opening guide

Click Here for Step By Step XM Trading Account Opening Guide

How to install DEMA Gator Trend Forex Trading Strategy?

  • Download DEMA Gator Trend Forex Trading Strategy.zip
  • *Copy mq4 and ex4 files to your Metatrader Directory / experts / indicators /
  • Copy tpl file (Template) to your Metatrader Directory / templates /
  • Start or restart your Metatrader Client
  • Select Chart and Timeframe where you want to test your forex strategy
  • Right click on your trading chart and hover on “Template”
  • Move right to select DEMA Gator Trend Forex Trading Strategy
  • You will see DEMA Gator Trend Forex Trading Strategy is available on your Chart

*Note: Not all forex strategies come with mq4/ex4 files. Some templates are already integrated with the MT4 Indicators from the MetaTrader Platform.

Click here below to download:

Save

Save



Get Download Access

LEAVE A REPLY

Please enter your comment!
Please enter your name here