74# Half Trend with ATR Channel

Submit by Joy22

Half Trend with ATR Channel is a trend reversal strategy for day and swing trading. This ATR channel repaints but it is not important because the strategy is supported by the half trend on this site I have already written similar strategies but with the TMA bands for the MT4, MT5 and TradingView trading platforms.

Indicators Setup:

ATR HiLo Channel (default setting): This
Half Trend (20): This
- Blue line and upward arrow: Indicates a bullish trend.
- Red line and downward arrow: Indicates a bearish trend.

Entry Conditions:

Buy Entry Conditions:
- Wait for the Half Trend indicator to show a buy arrow and a blue line, indicating a bullish trend.
- Once Half Trend confirms the uptrend, monitor the ATR HiLo Channel for a buy signal.

Sell Entry Conditions:
- Wait for the Half Trend indicator to display a sell arrow and a red line, signaling a bearish trend.
- After Half Trend confirms the downtrend, monitor the ATR HiLo Channel for a sell signal.

Exit Conditions:

Stop Loss:
- Place the stop loss a certain distance away, based on a multiple of the current ATR value (e.g., 1.5x or 2x ATR). This allows the stop to adapt to volatility, tightening or loosening according to market conditions.
Take Profit:
- Set the take profit level at a predefined risk-to-reward ratio, such as 1:1.2 - 1:1.5
- Alternatively, use the opposite ATR HiLo channel as a dynamic exit point (i.e., exit if the price touches the opposite channel).
Exit on Trend Reversal:
- If the Half Trend indicator shows an opposite arrow (e.g., a sell arrow after a buy position), exit the position immediately. This exit strategy helps lock in profits or minimize losses if the trend shifts.

Additional Considerations:

Avoiding Low Volatility Periods: Since ATR measures volatility, avoid entries when ATR is very low, as this may indicate sideways movement or choppy market conditions.
Time Frame: This strategy is adaptable to multiple time frames, but it’s often more reliable on higher time frames (e.g., H1 and above) due to reduced noise.
Risk Management: Never risk more than 1-2% of your account on a single trade, considering the potential losses due to the repainting nature of some indicators.

By combining the directional strength of the Half Trend with the volatility-based breakouts of the ATR HiLo Channel, this strategy aims to capture strong trend movements and minimize false entries. Always backtest the strategy thoroughly and practice sound risk management for the best results.