Gator BS Trend Retrace Forex Trading Strategy

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Gator BS Trend Retrace Forex Trading Strategy

Retracements are one of the best opportunities when trading the forex markets. This is especially true when trading in a trending market condition.

Most trend following traders are guilty of chasing price. Traders often take a trade whenever they that the market is moving. However, it would only take a few trades before a trader would realize that this does not always work. Still, many traders repeat the same mistake again and again. Probably because at times they would profit from such trades, especially trades that have an element of momentum behind it.

Cunning traders however do not take trades right away even if they see the trend moving. Instead, they wait for price to come to them. This allows them to get in on the market at a better price and with lesser risks. In short, they wait for retracements.

But how do we identify retracements. Well, there are many factors to take into account when looking for retracements. But a telltale sign would be price action showing congestion, price rejection and then momentum.

Gator Trend Retrace Forex Trading Strategy implements such ideas into its trading. It allows traders to identify when it is best to use a retracement entry giving traders a better chance of being in on a winning trade.

Gator Indicator

The Gator indicator is a custom indicator based on the Alligator indicator, also known as Williams Alligator.

The classic Williams Alligator is an indicator composed of a set of Smoothed Moving Averages (SMMA). These are 5-bar, 8-bar and 13-bar moving averages. Market conditions are observed based on the characteristics of the three SMMA lines. If the lines are contracted, then the market is in a choppy market condition. This is not a good time to trade the market. If the lines are opening up or are gapping, then the market is considered to be trending.

The Gator indicator is a modified version of the Alligator indicator. It is composed of tighter moving average lines which are more responsive to price movements. This allows traders to respond more quickly to price movements.

Bulls Bears RSI

Bulls Bears RSI, also know as BS Trend, is a trend filter indicator which helps traders identify the general trend direction. In fact, BS Trend is also short for Buy-Sell Trend.

The indicator is a simple indicator which plots bars. The bars could either be a -1 or 1. Positive bars indicate a bullish trend, while negative bars indicate a bearish trend.

The Bulls Bears RSI is mainly used as a trend filter. Traders often use this to identify the direction of the trend and trade according to that direction. However, it could also be used as an entry or exit signal. Traders could assume that the trend is reversing whenever the bars shift from positive to negative or vice versa. This would serve as a cue to enter or exit the market.

Trading Strategy

This trading strategy is a trend following strategy that trades on retracements. It uses a confluence of the Bulls Bears RSI, Gator indicator and price action to identify high probability entry points based on retracement.

This strategy filters trades based on the trend using the Bulls Bears RSI indicator. During bullish trending markets the BS Trend indicator stays positive for quite some time. During bearish trends the BS Trend indicator stays negative. This would also be confirmed by price action creating higher swing highs and swing lows during an uptrend, and lower swing highs and swing lows during a downtrend. The position of the Gator lines would also be arranged in a manner that confirms the direction of the trend. Trades should only be taken in the direction of the trend.

Then, we wait for price to retrace towards the Gator lines, start to congest, show signs of price rejection and then a momentum candle. Entries would usually be an engulfing or momentum candle that pushes against the Gator lines. This will then be followed by the Gator lines starting to open.

Indicators:

  • r_Gator (default setting)
  • BullBearRSI (default setting)

Currency Pairs: major and minor pairs

Preferred Time Frames: 30-minute, 1-hour and 4-hour charts

Trading Sessions: Tokyo, London and New York sessions

Buy Trade Setup

Entry

  • The BS Trend bars should be positive.
  • Price should be creating higher swing highs and swing lows.
  • The Gator lines should be stacked in the following order:
    • Top: Red
    • Middle: Green
    • Bottom: Blue
  • Price should retrace towards the Gator lines.
  • Open a buy order as soon as a bullish engulfing pattern occurs.

Stop Loss

  • Set the stop loss on the fractal below the entry candle.

Exit

  • Close the trade as soon as the BS Trend bars become negative.

Gator BS Trend Retrace Forex Trading Strategy

Gator BS Trend Retrace Forex Trading Strategy 2

Sell Trade Setup

Entry

  • The BS Trend bars should be negative.
  • Price should be creating lower swing highs and swing lows.
  • The Gator lines should be stacked in the following order:
    • Top: Blue
    • Middle: Green
    • Bottom: Red
  • Price should retrace towards the Gator lines.
  • Open a sell order as soon as a bearish engulfing pattern occurs.

Stop Loss

  • Set the stop loss on the fractal above the entry candle.

Exit

  • Close the trade as soon as the BS Trend bars become positive.

Gator BS Trend Retrace Forex Trading Strategy 3

Gator BS Trend Retrace Forex Trading Strategy 4

Conclusion

This strategy is a high probability strategy that works extremely well in a market that is trending. This is because the strategy is very logical. It trades in the direction of the trade, yet it waits for price to retrace allowing traders to take a trade on a better price.

It also waits for a momentum signal, specifically an engulfing pattern. This gives traders a hint that the trend is about to resume. Other variations may be to wait for price to pierce the swing point coming from the retracement. This would be a good trade entry due to the confirmation of a breach of the swing points, yet it would also lower the reward-risk ratio. It is up to you as a trader to discover what works well for you.


Forex Trading Strategies Installation Instructions

Gator BS Trend Retrace 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.

Gator BS Trend Retrace 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.

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How to install Gator BS Trend Retrace Forex Trading Strategy?

  • Download Gator BS Trend Retrace 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 Gator BS Trend Retrace Forex Trading Strategy
  • You will see Gator BS Trend Retrace 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.

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