Chart 1: This CounterTrend Strategy uses three indicators.
An UP Trend is shown when price stays above a rising black Gann HiLo line, testing the Hi Band and sometimes exceeding it.
A DOWN Trend is shown when price stays below a falling black Gann HiLo line, testing the Lo Band and sometimes dropping below it.
The steps for a Gann OFR buy or sell trade are listed below. Trade entry occurs when the currency retests the Gann HiLo line. After buy entry conditions occur, Gann OFR will buy if the market drops to the Gann HiLo line. When sell entry conditions occur, then GannOFR will sell if the market rises to retest the Gann HiLo line.
CT1 Gann OFR Buy Entry Rules:
In Chart 2, on October 10th a Sell Entry occurs at #5 in the EURJPY at 166.13.
CT1 Gann OFR Sell Entry Rules:
It is not possible, in advance, whether a small or larger profit will develop. So two profit targets are used. Half profit can be taken at or beyond the FAMA Band (Hi Band for Buy Trades; Lo Band for Sell Trades). The second profit target is the next key support or resistance beyond the FAMA Band. The Gann HiLo line is used a trailing stop to keep losses small and also to let profits run, per below exit rules.
Profit Targets
1st Profit Target: Opposite FAMA Band
In a buy trade, exit half the position at the FAMA Hi Band or above.
In a sell trade, exit half of the position at the FAMA Lo Band or below.
2nd Profit Target: The Next Key Pivot Line
A buy trade can target the next key Pivot Resistance above the Hi Band.
A sell trade can target the next key Pivot Support below the Lo Band
Price Closes beyond Trailing Stop
The Gann Hi/Lo Activator (‘Gann HiLo’) is used as a Trailing Stop. If the strategy position is long, then the strategy exits if price closes below the Gann HiLo line. If the strategy is short, then it exit the position if price closes above the Gann HiLo line.
Chart 3. A Sell Trade takes half profit at the Lo Band, then exits the other half on a strategy Buy signal.
The example in Chart 3 shows a sell trade at 166.13, near R2(Daily) Resistance. Half profit was taken at 165.63, at the Lo Band. The second half of the position was closed at 165.61, when a Gann OFR buy trade occurred. Profit on the trade was 51 pips (166.13-165.62 [average exit price]).
Gann OFR Buy Exit Rules:
Exit a BUY Position if
Gann OFR Sell Exit Rules:
Exit a Sell Position if
Initial Stop Loss Order:
Controls trade risk. Establish before the trade. (See "Risk Controller".)
Go to Risk Controller. Input risk preferences to determine:
Use the Trade Strategy Worksheet to control, monitor and record the trade.