Great Trend Trading System For MT4
Table Of Contents:
- Great Trend Trading System For MT4
- Great Trend Trading System For MT4 - Indicators Used and Chart Setup
- Trading the Great Trend Trading System For MT4
- Great Trend Trading System For MT4 - Stop Loss & Take Profit Settings
Please note: This strategy was publicly published in the trading community and is free to use. We do NOT make an attempt to decide if this strategy is profitable or not, because we know that the major factors regarding trading results are the skills/experience of the trader who executes the strategy. Therefore, we are mainly explaining the components and rules of the strategy. If applicable, we are highlighting advantages, disadvantages and possible improvements of the strategy.
The Great Trend Trading System For MT4 is a trend-following trading system that aims to follow the trend using more extended time frames. This forex trading strategy is based on two custom indicators, which are trend indicators.
The essence of using two trend indicators is to filter the signals that are generated to get a higher degree of accuracy than if each were to be used individually.
Great Trend Trading System For MT4 - Indicators Used and Chart Setup
Two custom indicators are used for this strategy. These are:
- Trendline indicator
- Trend Direction Indicator
The Trend Direction indicator is an arrow indicator that displays a red, down-arrow for a sell signal and a blue up-arrow for a buy signal. The arrows are meant to indicate to the trader where the trend of the asset is.
This indicator also has a dotted line, which is an Average True Range component that suggests to the trader when the trend move is exhausted. Once the arrow indication of the Trend Direction Indicator appears, the job of producing the entry indication becomes that of the Trendline Indicator.
Indicators on the AUDUSD 4-hour Chart
The Trendline Indicator has a moving-average line which produces two colours depending on where the asset is moving to. A colour change to red indicates that the trend move is expected to be to the downside, while the blue colour indicates a trend move to the upside.
Trading the Great Trend Trading System For MT4
Here is the description of how to trade the two sides to this strategy.
- Long entry
The conditions that must be fulfilled for the trader to go long are as follows:
- Trendline indicator is blue in colour.
- Trend Direction Indicator shows an up-arrow.
- The Trendline indicator is above the ATR line of the Trend Direction indicator.
The arrows signals provided by the Trend Direction indicator do not come with audio alerts. Therefore, the trader must rely on visual identification of the trade signals to execute the trades. The snapshot below demonstrates several buy trade setups, some of which were successful while others faltered.
Long Entry Setup
The chart above shows five buy trade setups, of which two met the criteria for long trade entries and were successful. One trade faltered and ended in a price position that would have triggered a stop loss. Two other setups did not meet the entry criteria despite the appearance of the blue up-arrow signals and are considered to be "no-trade" scenarios.
The first setup met the entry criteria. However, the price action did not move very far to the north before it reversed. The stop loss placement would have kept losses at 40 pips. Shortly after, a successful entry setup that would have produced 80 pips in profits occurred.
The next setup was even more successful and would have delivered 180 pips using the exit parameter of setting the Take Profit target at below a previous resistance. The next two trades were "no-trades" because the TrendLine indicator continued to show a red colour even when other parameters were fulfilled. As such, the trader would have walked away with at least 220 pips from the trade setups.
Great Trend Trading System For MT4 - Stop Loss & Take Profit Settings
There are several options that you can use in setting your exits, be they trade exits for gains (Take Profit) or those which end in losses (Stop Loss). For the stop loss, you may decide to set your SL immediately below the dotted ATR line of the Trend Direction indicator.
You may also choose to use pre-determined stop-loss settings for the trades. However, I do not advocate this option as it forces the trader to settle for profit targets which may not suit the 1:2 or 1:3 risk-reward ratio recommended as a minimum for all trades. If the price goes below the dotted line, this is already an indication that the trade will not end in the trader's favour.
For the TP, you may decide to do the following:
- Close the trade manually if a down-arrow appears.
- You may also use a trailing stop when your gain on the 4-hour chart is at 80 pips (200 pips for daily chart), or you may close half the position and move the SL to the entry price.
- The potential Take Profit target is set a little below a prior resistance level.
In all instances, a minimum risk-reward ratio (RRR) of 1:3 is desirable.
2) Short Entry
- 4H trader indicator (arrow buy) appears at or below a resistance line.
- CCI indicator >70 level (i.e. it is overbought)
- Trend Strength downtrend >50.
- Red down-signal arrow appears when a resistance trendline appears on the price chart.
This is how a complete short entry setup looks on the 4-hour chart. Again, do not simply sell when the 4H Trader arrow gives an audio alert with a pop-up. Only trade when all four parameters align.
Short Trade Setup
This is the AUDUSD daily chart, where four trade opportunities presented themselves. Only two would have been successful with total gains of 510 pips. This would have exceeded the total loss of 142 pips on the two losing setups. This shows how to use appropriate risk-reward ratios to get good profits for any pips risked.
Stop Loss & Take Profit Settings
For the stop loss, set your SL immediately above the dotted ATR line of the Trend Direction indicator. In setting the profit targets, any of these methods can be used.
- Close the trade manually if an up-arrow appears.
- You can use a trailing stop when your gain on the 4-hour chart is at 80 pips (200 pips for daily chart).
- When you are in advanced profits but not yet close to a previous support, you may close half the position and move the SL to the entry price.
- The potential Take Profit target may be set a little above a prior support level.
You will need to practice the identification of the setups in order to ensure all parameters align properly before executing the trades. Do not adjust your stop loss at any time during the trade once you have set it according to the stipulated parameters.
Download the complete system description and the files here:
Partially Automated Trading Besides Your Day Job
Alerts In Real-Time When Divergences Occur
