Trend trading is probably one of the most logical types of trading strategies available. Some traders even go as far as saying that trading with the trend is the only way to trade. Although there are definitely other trading strategies aside from trading with the trend that do work, trading with the trend is probably one of the easiest and most popular types of strategies.
The question however is how to trade the trend whenever you have identified a trending market condition? Now, I would not say that this is the only way to trade with the trend but trading on retracements is definitely a very good strategy. Think of it as buying at a discount in a market that is rallying up. You get the best of both worlds. You are trading with the trend and you are buying low and selling high.
The Gann HiLo Activator Bars
Table of Contents
The original Gann HiLo Activators is usually plotted as a moving average is plotted on the chart. This is because it is basically a simple moving average of the high or low of the last three candles.
The Gann HiLo Activator Bars however is not plotted as a moving average. Instead, it is a bar overlaid on the candlesticks which changes color whenever the trend direction changes. In fact it resembles more closely the Heiken Ashi candlesticks.
With that said, although the traditional Gann HiLo Activators, which are plotted 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 changing of the color of the bars could be interpreted as the reversal of the trend. This allows traders to have a specific entry point which is not based on subjective judgement 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 exploits the opportunities presented on an established trend. These opportunities are presented during the retracements using the Gann HiLo Activator Bars as a basis for the entry.
First off, since this is a trend following strategy, we would have to be able to identify the direction of the trend. To do this, we will be using the 50-period Exponential Moving Average (EMA). The 50 EMA is a mid-term moving average commonly used by many traders. To identify the trend, we would have to identify where the location of price is in relation to the 50 EMA and identify if the 50 EMA is sloping towards the direction of the trend. The steeper the slope, the stronger the trend. Trends with a relatively flat slope should be assessed with caution as this might indicate that the trend is not as strong. This will serve as our trend direction filter.
Then, after identifying a trending market condition, we wait for the price to retrace. This short-term retracement should coincide with the Gann HiLo Activator Bars to change color going against the trend established by the 50 EMA. However, this change in direction in the short-term should not last long if indeed this is just a retracement. The Gann HiLo Activator Bars should revert back to its previous color indicating that the retracement has ended, and the trend direction has resumed. This is where we take the trade.
- 50-period Exponential Moving Average (EMA) (gold)
- Gann HiLo Activator Bars
Timeframe: 5-min, 15-min, 30-min, 1-hour, 4-hour and daily charts
Currency Pair: any; stick with high volatility low trading cost pairs for timeframes 5-min and 15-min
Trading Session: any; stick with London and New York sessions for 5-min and 15-min timeframes
Buy (Long) Trade Setup
- Price should be above the 50 EMA
- The 50 EMA should be sloping up indicating that bullish trend is strong
- Wait for the Gann HiLo Activator Bars to turn orange indicating that the bullish trend is retracing
- Wait for the Gann HiLo Activator Bars to turn back to blue indicating that the bullish trend is resuming its direction
- Enter a buy trade as soon as 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
- Price should be below the 50 EMA
- The 50 EMA should be sloping down indicating that bearish trend is strong
- Wait for the Gann HiLo Activator Bars to turn blue indicating that the bearish trend is retracing
- Wait for the Gann HiLo Activator Bars to turn back to orange indicating that the bearish trend is resuming its direction
- Enter a sell trade as soon as 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 notice on the examples above, there are a couple of trades on both charts. In fact, the sell chart had three profitable trades using this strategy if you would look at it closely.
On the right market environment, this strategy is a high probability, high reward strategy. This could allow for a high win-loss ratio while having a high reward-risk ratio at the same time. The key though is identifying if the market is indeed trending strong enough.
It is also important to note that trends would usually allow for two or three retracements at a time. Trades after the third opportunity should be considered carefully as this might be the end of the trending move. However, it is not uncommon to find trends that last four, five or even more times. It is up to you as a trader to assess if the trend’s strength is still there and if it is still worth taking the risk on setups after the third wave.
Forex Trading Strategies Installation Instructions
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 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 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 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 Gann Bars Forex Trend Trading Strategy
- You will see Gann Bars Forex Trend 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: